Assessment Problem

| June 11, 2016

1. Todd%u2019s Garden Company manufactures a fertilizer known as Great Garden. The manufacturing process begins in the Grading Department when raw materials are started in process. Upon completion of processing in the Grading Department, the output is transferred to the Saturating Department for the final phase of production. Here the product is saturated with water and then dried again. There is no weight gain in the process, and the water is free. The following information is available for the month of February.

Work%u2013in-Process Inventories:

Grading Department Saturating Department

February 1 Quantity in pounds Cost

None $0 1,000 $54,000*

February 28 Quantity in pounds

None 5,000

*Includes $4,000 in Saturating Department conversion costs.

The work-in-process inventory in the Saturating Department is estimated to be 50% complete both at the beginning and end of February. Costs of production for February are as follows:

Costs of Production

Grading Department Saturating Department

Materials Used

$280,000 $0


$80,000 $34,500

The material used in the Grading Department weighed 40,000 pounds.

INSTRUCTIONS: Prepare a Production report for the Grading Department and for the Saturating Department.


South River Chemical manufactures a product called Zbek. Direct Materials are added at the beginning of the process, and conversion activity occurs uniformly throughout production. The beginning work-in-process inventory is 60% complete with respect to conversion; the ending inventory work-in-process inventory is 20% complete. The following data pertain to May:

Work in Process, May 1 Units started during May Units completed and transferred out Work in Process, May 31

UNITS 15,000 60,000 68,000



$16,500 72,000 $88,500

Costs: Work in Process, May 1 Costs incurred during May Totals


$41,250 234,630 $275,880


$24,750 162,630 $187,380

Compute the following amounts: 1. Using the weighted-average method of process costing, determine the equivalent units for

direct material and conversion. 2. What is the cost per unit if direct materials and conversion activity? 3. Determine the cost of the goods completed and transferred during May. 4. Determine the cost of the ending work-in-process on May 31.

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