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		69,000
Pounds started into production during May		340,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 80% complete; conversion 20% complete		15,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	78,000
Conversion cost	$	15,300
Cost added during May:
Materials cost	$	405,140
Conversion cost	$	83,950

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

Solution 1:

Computatio of Equivalent units - Weighted Average - Builder Products, Inc.
Particulars	Physical Units	Equivalent units
		Material	Conversion
Work in Process, beginning	69000
Started during the current period	340000
Total units to account for	409000
Units accounted for:
Unit completed & Transferred out	394000	394000	394000
Closing WIP:	15000
Material (80%)		12000
Conversion (20%)			3000
Equivalent units of production	409000	406000	397000

Solution 2:

Computation of Cost per equivalent unit of Production
Particulars	Material	Conversion
Opening WIP	$78,000.00	$15,300.00
Cost Added during Period	$405,140.00	$83,950.00
Total cost to be accounted for	$483,140.00	$99,250.00
Equivalent units of production	406000	397000
Cost per Equivalent unit	$1.19	$0.25

Solution 3 & 4:

Computation of Cost of ending WIP and units completed & transferred out - Weighted Average
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	12000	3000
Cost per equivalent unit	$1.19	$0.25
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$14,280	$750	$15,030
Units completed and transferred	394000	394000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$468,860	$98,500	$567,360

Solution 5:

Cost reconcilaition - Weighted Average - Builder Products, Inc.
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory	$93,300.00
Cost added to production	$489,090.00
Total Cost to be accounted for	$582,390.00
Costs accounted for as follows:
Cost of unit transferred out	$567,360
Ending WIP	$15,030
Total cost accounted for	$582,390.00