Question

Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 83,000 Pounds started into production during May 480,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 75% complete; conversion 25% complete 43,000 Cost data: Work in process inventory, May 1: Materials cost $ 128,300 Conversion cost $ 53,900 Cost added during May: Materials cost $ 666,940 Conversion cost $ 296,395 Required: 1. Compute the equivalent units of production for materials and conversion for May. 2. Compute the cost per equivalent unit for materials and conversion for May. 3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May. 4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. 5. Prepare a cost reconciliation report for May.

Answer 1

Requirement 1

	Material	Conversion
Equivalent Units of Production	5,52,250	5,30,750

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$                 1.44	$              0.66

Requirement 3 and 4

	Material	Conversion	Total
Units Completed and transferred	$         7,48,800	$      3,43,200	$        10,92,000
Ending Inventory	$             46,440	$            7,095	$              53,535

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$     1,82,200.00
Cost incurred during period	$     9,63,335.00
Total cost to be accounted for	$   11,45,535.00
Costs accounted for as follows:
Cost of Units Transferred Out	$   10,92,000.00
Cost of Ending Wip	$        53,535.00
Total cost accounted for	$   11,45,535.00

Working

Reconciliation of Units
A	Opening WIP	83,000
B	Introduced	4,80,000
C=A+B	TOTAL	5,63,000
D	Transferred	5,20,000
E=C-D	Closing WIP	43,000

Statement of Equivalent Units
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	5,20,000			100%	5,20,000	100%	5,20,000
Closing WIP	43,000			75%	32,250	25%	10,750
Total	5,63,000			Total	5,52,250	Total	5,30,750

Cost per Equivalent Units
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost		$      1,28,300	$              53,900	$        1,82,200
Cost incurred during period		$      6,66,940	$          2,96,395	$        9,63,335
Total Cost to be accounted for		$      7,95,240	$          3,50,295	$      11,45,535
Total Equivalent Units		5,52,250	5,30,750
Cost per Equivalent Units		$              1.44	$                   0.66

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$              1.44	32,250	$   46,440	$        5,20,000	$     7,48,800
Conversion	$              0.66	10,750	$      7,095	$        5,20,000	$     3,43,200
TOTAL	$   11,45,535	TOTAL	$   53,535	TOTAL	$ 10,92,000