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 85,000 Pounds started into production during May 500,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 80% complete; conversion 20% complete 45,000 Cost data: Work in process inventory, May 1: Materials cost $ 135,700 Conversion cost $ 22,000 Cost added during May: Materials cost $ 705,260 Conversion cost $ 120,740 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

Beginning WIP inventory	85000
Add: Units started during May	500000
Less: Ending inventory	45000
Units completed and transferred	540000
1		Equivalent Units
	Whole units	Materials	Conversion
Units completed and transferred	540000	540000	540000
Ending inventory	45000	36000	9000
Units accounted for	585000	576000	549000
	Materials	Conversion
Equivalent units of production	576000	549000
2
Cost Data:	Total	Material	Conversion
Beginning WIP inventory	157700	135700	22000
Current costs	826000	705260	120740
Total cost to account for	983700	840960	142740
Divided by Equivalent units		576000	549000
Cost per Equivalent unit	1.72	1.46	0.26
	Materials	Conversion
Cost per Equivalent unit	1.46	0.26
3
Cost Assignment:
Ending Work in process:
Materials	52560	=36000*1.46
Conversion	2340	=9000*0.26
Total Ending Work in process	54900
4
Cost of units completed and transferred
Materials	788400	=540000*1.46
Conversion	140400	=540000*0.26
Total	928800
5
Cost to be accounted for:
Beginning WIP inventory	157700	=135700+22000
Current costs	826000	=705260+120740
Total costs to be accounted for	983700
Cost accounted for as follws:
Cost of units completed and transferred	928800
Cost of ending work in process	54900
Total costs accounted for	983700