Question

Builder Products, Inc., 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		85,000
Pounds started into production during May		500,000
Pounds completed and transferred out		?
Pounds in process, May 31:       materials 80% complete; conversion 20% complete		45,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	135,700
Conversion cost	$	22,000
Cost added during May:
Materials cost	$	705,260
Conversion cost	$	120,740

The company uses the weighted-average method.

Required:

1.	Compute the equivalent units of production.

2.	Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)

3.	Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Round your intermediate calculation to 2 decimal places.)

4.	Prepare a cost reconciliation report for the month.

  

Answer 1

Units completed and transferred out
Opening WIP	85000
Units started into production	500000
Closing WIP	-45000
Units completed and transferred out	540000

Answer to Question No. 1

Equivalent units of production
	Materials	Conversion
Units completed and transferred out	540000	540000
Closing WIP
Materials (45000 X 80%)	36000
Conversion (45000 X 20%)		9000
Equivalent units of production	576000	540000
Answer to Question No. 2
Cost per equivalent unit
	Materials	Conversion
Cost of opening WIP	135700	22000
Cost added during the period	705260	120740
Total cost (a)	840960	142740
Equivalent units of production (b)	576000	540000
Cost per equivalent unit (a/b)	1.46	0.26
Answer to Question No. 3
	Materials	Conversion	Total ($)
Ending WIP Inventory	36000	9000
Cost per equivalent unit	1.46	0.26
Total cost of ending WIP inventory	52560	2379	54939
Units completed and transferred out	540000	540000
Cost per equivalent unit	1.46	0.26
Total cost of units completed and transferred	788400	142740	931140