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		90,000
Pounds started into production during May		550,000
Pounds completed and transferred out		?
Pounds in process, May 31:       materials 70% complete; conversion 30% complete		50,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	152,300
Conversion cost	$	63,300
Cost added during May:
Materials cost	$	791,450
Conversion cost	$	348,100

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.

  

Answer 1

1)					Material		Conversion
	Equivalent units of production				6,25,000		6,05,000
	Working:
					Material			Conversion
				Physical Units	% of completion	Equivalent units of production		% of completion	Equivalent units of production
	Units completed			5,90,000	100%	5,90,000		100%	5,90,000
	Ending Work in process			50,000	70%	35,000		30%	15,000
	Total			6,40,000		6,25,000			6,05,000
2)					Material		Conversion
	Cost per equivalent unit				$                          1.51		$         0.68
	Working:
					Material		Conversion
	Work in process,Inventory				$                 1,52,300		$     63,300
	Costs added during May				$                 7,91,450		$ 3,48,100
	Total costs				$                 9,43,750		$ 4,11,400
	/ Equivalent units of production				6,25,000		6,05,000
	Cost per equivalent unit				$                          1.51		$         0.68
3)
	Cost of ending work in process inventory				$                     63,050
	Cost of units transferred out				$               12,92,100
	Working:
					Equivalent units	Cost per Equivalent units		Total costs	Total
	Cost of ending work in process inventory:
	Materials				35,000	$                   1.51		$           52,850
	Conversion				15,000	$                   0.68		$           10,200	$              63,050
	Cost of units transferred out:
	Materials				5,90,000	$                   1.51		$       8,90,900
	Conversion				5,90,000	$                   0.68		$       4,01,200	$        12,92,100
4)	Cost reconcilation report:
					Materials	Conversion		Total
	Work in process-Beginning Inventory				$                 1,52,300	$              63,300		$       2,15,600
	Costs incurred dueing the period				$                 7,91,450	$           3,48,100		$     11,39,550
	Total costs				$                 9,43,750	$           4,11,400		$     13,55,150
	Costs transferred out				$                 8,90,900	$           4,01,200		$     12,92,100
	Cost of ending work in process				$                     52,850	$              10,200		$           63,050
	Total costs							$     13,55,150