Question

Exercise 5-6 Equivalent Units of Production-Weighted-Average Method [LO5-2] Highlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below: Percent Completed Tons of Pulp Materials Labor and Overhead Work in process, June 1 80,600 81 % 25 % Work in process, June 30 51,900 42 % 17 % Started into production during June 301,100 Required: 1. Compute the number of tons of pulp completed and transferred out during June. 2. Compute the equivalent units of production for materials and for labor and overhead for June.

Answer 1

1. Tons of pulp completed and transferred out in June:

= Beginning Work in Process + Started into production in June - Ending WIP

= 80,600 + 301,100 - 51,900

= ‭329,800‬ tons

2. Equivalent units for Materials:

= Units completed and transferred out + Ending Equivalent units

= ‭329,800‬ + (51,900 * 42%)

= ‭351,598‬ tons

Equivalent units for Labor:

= 329,800 + (51,900 * 17%)

= ‭338,623‬ tons