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		87,000
Pounds started into production during May		520,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 75% complete; conversion 25% complete		47,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	142,100
Conversion cost	$	63,300
Cost added during May:
Materials cost	$	738,870
Conversion cost	$	348,360
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) COMPUTE EQUIVALENT UNIT :
	whole unit	%	material	%	conversion cost
Unit transferred out (87000+520000-47000)	560000	100%	560000	100%	560000
Ending work in process	47000	75%	35250	25%	11750
Total			595250		571750
2) CALCULATE COST PER EQUIVALENT UNIT :
	Material	conversion cost
Beginning work in process cost	142100	63300
Cost during the period	738870	348360
Total costs	880970	411660
equivalent unit	595250	571750
cost per equivalent unit	1.48	0.72
3) COMPUTE COST OF ENDING WORK IN PROCESS
	MATERIAL	CONVERSION COST	TOTAL
ENDING WORK IN PROCESS	(47000*75%*1.48)	(47000*25%*072)
	52170	8460	60630
4) COMPUTE COST OF UNIT TRANSFERED OUT :
	Material	conversion cost	total
Unit transfered out	(560000*1.48)	(560000*0.72)
	828800	403200	1232000
Reconciliation report
Cost to be accounted for
Beginning work in process	205400
Cost during the period	1087230
Total cost to be accounted for	1292630
Cost accounted for as follows :
Unit transfered out cost	1232000
Ending work in process	60630
Total cost accounted for	1292630
	0