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		73,000
Pounds started into production during May		380,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 80% complete; conversion 20% complete		33,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	111,600
Conversion cost	$	55,800
Cost added during May:
Materials cost	$	580,320
Conversion cost	$	306,810

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

	Beginning work in process			73,000	Completed & Transferred			420,000
	pounds started in production			380,000	ending work in process			33,000
	units to be accounted			453,000	units accounted for			453,000
1)	Equivalent units of production
				units	%	materials	%	CC
	Completed & Transferred			420,000	100%	420,000	100%	420,000
	ending work in process			33,000	80%	26400	20%	6600
	Equivalent units of production					446,400		426,600
2)	Cost per unit
					Materials	CC	Total
	Beginning work in proces				111,600	55,800	167400
	cost added during the year				580,320	306,810	887,130
	total cost				691920	362,610	1054530
	equivalent units				446,400	426,600
	cost per unit				1.55	0.85	2.4
3)	cost of ending work in process inventory
	Materials	26400*1.55			40920
	CC	6600*.85			5610
	cost of ending WIP				46530
4)	cost of units tranferred out
	materials	420000*1.55			651000
	Conversion	420000*.85			357000
	total				1008000
5)	cost reconcilation report
	costs to be accouted for:
	Beginning WIP				167,400
	cost added during the year				887,130
	total cost to be accounted				1,054,530
	cost accounted for
	ending work in process				46,530
	Completed & transferred				1,008,000
	cost accounted for				1,054,530