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		64,000
Pounds started into production during May		290,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		24,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	69,500
Conversion cost	$	23,500
Cost added during May:
Materials cost	$	361,000
Conversion cost	$	129,320

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

1.

		Equivalent units
	Whole units	Materials	Conversion
Units completed and transferred (64,000+290,000-24,000)	330,000	330,000	330,000
Ending work in process	24,000	14,400 (24,000*60%)	9,600 (24,000*40%)
Total	354,000	344,400	339,600

2.

	Material	Conversion
Beginning work in process	$69,500	$23,500
Cost added during May	361,000	129,320
Total costs	430,500	152,820
Equivalent units	344,400	339,600
Cost per equivalent unit	$1.25	$0.45

3. Cost of ending work in process:

Material (14,400*$1.25)	$18,000
Conversion (9,600*$0.45)	4,320
Total costs	$22,320

4. Cost of units transferred out to next department:

Materials (330,000*$1.25)	$412,500
Conversion (330,000*$0.45)	148,500
Total costs	$561,000

5.

Cost Reconciliation
Cost to be accounted for:
Beginning work in process	$93,000
Cost added during May	490,320
Total cost to be accounted for	583,320
Cost accounted for:
Completed and transferred out	561,000
Ending work in process	22,320
Total costs accounted for	$583,320