Weston Products manufactures an industrial cleaning compound that goes through t

Question

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-account for the Grinding Department for May is given below:

Completed and transferred to
the Mixing Department

The May 1 work in process inventory consisted of 73,000 pounds with $102,930 in materials cost and $35,040 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 80% complete with respect to conversion. During May, 394,000 pounds were started into production. The May 31 inventory consisted of 122,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method to account for units and costs.

  

Determine the costs per equivalent unit for May. (Round your answers to 2 decimal places.)

  

Determine the cost of the units completed and transferred to the Mixing Department during May.

  

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-account for the Grinding Department for May is given below:

Explanation / Answer

Solution:

Firstly we will calculate the quantity schedule:

Opening units as at 1st May (A) : 73000

Add: Units produced during May(B) : 394000

Total units(C=A+B) : 467000

Closing units(D) : 122000

Units transferred out (E=D-C):345000

Now, we need to calculate the Equivalent units:

Next,calculate cost per Equivalent unit:

Now ,cost of units transferred to mixing department is equal to 748650 ( 345000*2.17)

Also cost of work in process as at 31st May is :

Material cost Conversion cost Units transferred (A) 345000 345000 Units as on 31st May(B) 122000 122000 Percentage of completion(C) 100% 60% Equivalent units as at 31st May D= B*C 122000 73200 Total Equivalent units A+D 467000 418200

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