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		77,000
Pounds started into production during May		420,000
Pounds completed and transferred out		?
Pounds in process, May 31:       materials 80% complete; conversion 20% complete		37,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	130,300
Conversion cost	$	61,100
Cost added during May:
Materials cost	$	677,540
Conversion cost	$	336,190

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. (Do not round your intermediate calculations.)

  

Answer 1

	Beginning work in process			77,000	Completed & Transferred			460,000
	pounds started in production			420,000	ending work in process			37,000
	units to be accounted			497,000	units accounted for			497,000
1)	Equivalent units of production
				units	%	materials	%	CC
	Completed & Transferred			460,000	100%	460,000	100%	460,000
	ending work in process			37,000	80%	29600	20%	7400
	Equivalent units of production					489,600		467,400
2)	Cost per unit
					Materials	CC	Total
	Beginning work in proces				130,300	61,100	191400
	cost added during the year				677,540	336,190	1,013,730
	total cost				807840	397,290	1205130
	equivalent units				489,600	467,400
	cost per unit				1.65	0.85	2.5
3)	cost of ending work in process inventory
	Materials	29600*1.65			48840
	CC	7400*.85			6290
	cost of ending WIP				55130
4)	cost of units tranferred out
	460,000*2.5				1150000
5)	cost reconcilation report
	costs to be accouted
	Beginning WIP				191,400
	cost added during the year				1,013,730
	cost to be accounted				1,205,130
	cost accounted for
	Completed & transferred				55,130
	ending WIP				1,150,000
	cost accounted for				1,205,130