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: Work in Process—Grinding Department Debit Credit Inventory, May 1 451,950 Completed and transferred to the Mixing Department ? Materials 570,560 Conversion 296,232 Inventory, May 31 ? The May 1 work in process inventory consisted of 131,000 pounds with $279,030 in materials cost and $172,920 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 240,000 pounds were started into production. The May 31 inventory consisted of 113,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method in its process costing system. Required: 1. Compute the Grinding Department's equivalent units of production for materials and conversion in May. 2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May. 3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May. 4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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:
| Work in Process—Grinding Department | |||
|---|---|---|---|
| Debit | Credit | ||
| Inventory, May 1 | 451,950 | Completed and transferred to the Mixing Department | ? |
| Materials | 570,560 | ||
| Conversion | 296,232 | ||
| Inventory, May 31 | ? |
The May 1 work in process inventory consisted of 131,000 pounds with $279,030 in materials cost and $172,920 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 240,000 pounds were started into production. The May 31 inventory consisted of 113,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method in its
Required:
1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.
2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.
3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.
4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.
Introduction:
Equivalent units of production are the work-in-process inventory at the end of an accounting period. It is the number of finished units of an item that a company might theoretically have produced given the amount of direct materials, direct labor, and factory overhead expenditures spent on things that were not yet completed during that time period.
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