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		81,000
Pounds started into production during May		460,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 80% complete; conversion 20% complete		55,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	158,200
Conversion cost	$	50,500
Cost added during May:
Materials cost	$	822,300
Conversion cost	$	277,520

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
Equivalent units of production (EUP)
	Units	% material	EUP-Materials	% Conversion	EUP- Conversion
Units Completed and transferred out (81000+460000-55000)	486000	100%	486000	100%	486000
units of Ending work in process	55000	80%	44000	20%	11000
Equivalent units of production			530000		497000

Solution 2
Cost per Equivalent unit:	Material	Conversion
Cost of Beginning Work in Process	$1,58,200	$50,500
Cost added during the month	$8,22,300	$2,77,520
Total Costs	$9,80,500	$3,28,020
/Equivalent units of Production	530000	497000
Cost per Equivalent unit of Production	$1.85	$0.66

Solution 3
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Material	44000	$1.85	$81,400
Conversion	11000	$0.66	$7,260
Total Ending work in process			$88,660

Solution 4
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
Material	486000	$1.85	$8,99,100
Conversion	486000	$0.66	$3,20,760
Total transferred out			$12,19,860

Solution 5:
Cost Reconciliation Report - July
Particulars	Amount
costs to be accounted for:
Cost of beginning WIP inventory	$2,08,700
Cost added to production	$10,99,820
Total Cost to be accounted for	$13,08,520
Costs accounted for as follows:
Cost of unit transferred out	$12,19,860
Cost of Ending WIP	$88,660
Total cost accounted for	$13,08,520