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		74,000
Pounds started into production during May		390,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 70% complete; conversion 30% complete		34,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	98,800
Conversion cost	$	44,000
Cost added during May:
Materials cost	$	513,830
Conversion cost	$	242,130

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 the equivalent units of production for materials and conversion for May.

	Physical unit	%	EUP-material	%	EUP-conversion
Units transferred out	430000	100%	430000	100%	430000
Ending work in process	34000	70%	23800	30%	10200
Total	464000		453800		440200

2. Compute the cost per equivalent unit for materials and conversion for May.

	Material	Conversion
Beginning work in process	98800	44000
Cost added during period	513830	242130
Total cost	612630	286130
Equivalent unit	453800	440200
Cost per equivalent unit	1.35	0.65

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

	Material	Conversion	Total
Cost of ending work in process	32130	6630	38760

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

	Material	conversion	Total
Cost of units transferred out	580500	279500	860000

5. Prepare a cost reconciliation report for May.

Cost to be accounted as
Beginning work in process	142800
Cost added during period	755960
Total cost to be accounted as	898760
Cost accounted as
cost of Units transferred out	860000
Cost of ending work in process	38760
Total cost accounted as	898760