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:
Units in process, May 1: 100% complete as to materials and 80% complete as to labour and overhead		15,600
Units started into production during May		116,000
Units completed and transferred out		106,000
Units in process, May 31: 60% complete as to materials and 20% complete as to labour and overhead		?
Cost data:
Work-in-process inventory, May 1:
Materials cost	$	2,300
Labour cost		2,880
Overhead cost		6,600
Cost added during May:
Materials cost		172,000
Labour cost		28,800
Overhead cost		77,200

Materials are added at several stages during the cooking process, whereas labour and overhead costs are incurred uniformly. The company uses the weighted average cost method. The company combines labour and overhead into a single cost category—conversion cost.

Required:
Prepare a production report for the cooking department for May. Use the following three steps in preparing your report:

1. Prepare a quantity schedule and a computation of equivalent units.

	Quantity Schedule
Units to be accounted for:
Total Units

			Equivalent units
	Units	labor	material	overhead
units accounted for as follows:
Total units and equivalent units of production

2. Compute the costs per equivalent unit for the month. (Round your answers to 3 decimal places.)

	materials	labor	overhead
Cost per equivalent unit

3. Using the data from parts (1) and (2), prepare a cost reconciliation. (Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

Note: There is a difference of "$53" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for".

			Equivalent units
	total cost	materials	labour	overhead
cost accounted for as follows:
work in process May 31:
total work in process
Total cost

4. Prepare a production report for the cooking department for May. Assuming the company uses the FIFO method. Follow parts (1) to (3). (Leave no cells blank, enter "0" wherever required. Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

  
Quantity Schedule and Equivalent Units

	Quantity Schedule
Units to be accounted for:
Total Units

			Equivalent units
	Units	labor	material	overhead
units accounted for as follows:
Total units and equivalent units of production

Cost per Equivalent Unit

	materials	labor	overhead
Cost per equivalent unit

Cost Reconciliation

Note: There is a difference of "$53" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for".

			equivalent units
	total cost	materials	labour	overhead
Cost accounted for as follows:
prior period cost in work in process, May 1	11780
the cost incurred during May
to complete units WIP may, 1
total
to partially complete units WIP, May 31
total
total cost

Cost transferred out may 31 ____ ______ ____________ _______

Answer 1

1,2 & 3) Production report - Cooking Deptt (for May)
Weighted Average Cost Method:
	Physical units	Mat. Cost	Conver Cost	Total
WIP Op	15600	15600	15600
Started and Compl. Units	90400	90400	90400
Transferred out	106000
WIP Cl (b)	25600	15360	5120
Equivalent units		121360	111120
Total Costs:
Opening costs		2300	9480	11780
Cost incurred in May		172000	106000	278000
Costs to account for:		174300	115480	289780
Cost per Eq. unit (a)		1.436222808	1.039236861
Total cost of Transferred out:		152240	110159	262399	(106000*a)
Total cost of WIP Cl:		22060	5321	27381	(b*a)
Costs accounted for				289780
4) Production report - Cooking Deptt (for May)
FIFO Method:
	Physical units	Mat. Cost	Conver Cost	Total
WIP Op ('c)	15600	0	3120	11780
Started and Compl. Units (d)	90400	90400	90400
Transferred out	106000
WIP Cl (b)	25600	15360	5120
Equivalent units		105760	98640
Cost incurred in May		172000	106000	278000
Cost per Eq. unit (a)		1.626323752	1.074614761
Costs to account for:				289780
Total cost of WIP Op:
Opening cost		2300	9480	11780
Add: during may		0	3353	3353	(c*a)
Total cost of WIP Op:		2300	12833	15133
Cost of Started & Compl.		147020	97145	244165	(d*a)
Total cost of Transferred out:				259298
Total cost of WIP Cl:		24980	5502	30482	(b*a)
Costs accounted for				289780