Question

Exercise 5-8 Equivalent Units; Cost per Equivalent Unit; Assigning Costs to Units-Weighted-Average Method [LO5-2, LO5-3, LO5-4] Helix Corporation uses the weighted-average method in its process costing system. It produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow: Percent Complete Units Materials Conversion Work in process inventory, May 1 70,000 100 % 40 % Work in process inventory, May 31 50,000 100 % 25 % Materials cost in work in process inventory, May 1 $ 56,100 Conversion cost in work in process inventory, May 1 $ 16,400 Units started into production 255,000 Units transferred to the next production department 275,000 Materials cost added during May $ 112,900 Conversion cost added during May $ 236,600 Required: 1. Calculate the first production department's equivalent units of production for materials and conversion for May. 2. Compute the first production department's cost per equivalent unit for materials and conversion for May. 3. Compute the first production department's cost of ending work in process inventory for materials, conversion, and in total for May. 4. Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May.

Answer 1

1. Calculate the first production department's equivalent units of production for materials and conversion for May.

• materials = 275,000 + 50,000 = 325,000
• conversion = 275,000 + 12,500 = 287,500

2. Compute the first production department's cost per equivalent unit for materials and conversion for May.

• materials = $169,000 / 325,000 = $0.52
• conversion = $253,000 / 287,500 = $0.88

3. Compute the first production department's cost of ending work in process inventory for materials, conversion, and in total for May.

• materials = 50,000 x $0.52 = $26,000
• conversion = 12,500 x $0.88 = $11,000
• total = $37,000

4. Compute the first production department's cost of the units transferred to the next production department for materials, conversion, and in total for May.

• materials = 275,000 x $0.52 = $143,000
• conversion = 275,000 x $0.88 = $242,000
• total = $385,000

Step-by-step explanation:

Beginning WIP 70,000 units

materials $56,100

conversion $16,400

Ending WIP 50,000 units

100% completed for materials (50,000 EU)

25% completed for conversion (12,500 EU)

units started 255,000

total units transferred out 275,000

materials cost added during the period = $112,900

conversion cost added during the period = $236,600