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		70,000
Pounds started into production during May		350,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 70% complete; conversion 30% complete		30,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	86,900
Conversion cost	$	39,300
Cost added during May:
Materials cost	$	451,510
Conversion cost	$	216,060

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

	Pounds completed and transferred out:
						$
	Pounds in process, May 1					70000
	Add: Pounds started into production					350000
						420000
	Less: Pounds in process, May 31					30000
	Pounds completed and transferred out					390000
1	Equivalent units of production
						Units	Materials	Conversion
	Pounds completed and transferred out					390000	390000	390000
	(100% competed)
	Pounds in process, May 31					30000	21000	9000
	(Material-70%,Conversion-30% complete)						(30000*70%)	(30000*30%)
	Total equivalent units						411000	399000
2	Cost per equivalent units
							Materials	Conversion	Total
	Work in process inventory,May 1						86900	39300	126200
	Cost added during May						451510	216060	667570
	Total cost					a	538410	255360	793770
	Total equivalent units					b	411000	399000
	Cost per equivalent units					a/b	1.31	0.64
3	Cost of ending work in process
							Materials	Conversion	Total
	Equivalent units of ending work in process					a	21000	9000
	Cost per equivalent units					b	1.31	0.64
	Cost of ending work in process					a*b	27510	5760	33270
4	Cost of units transferred out:
							Materials	Conversion	Total
	Equivalent units of pounds completed and transferred					a	390000	390000
	Cost per equivalent units					b	1.31	0.64
	Cost of units transferred out					a*b	510900	249600	760500
5			Cost reconciliation
								$
	Costs to be accounted for:
	Cost of beginning work in process inventory					(86900+39300)		126200
	Costs added to production during the period					(451510+216060)		667570
	Total costs to be accounted for							793770
	Costs accounted for as follows:
	Costs of units completed and transferred out							760500
	Costs of ending work in process inventory							33270
	Total costs accounted for							793770