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		88,000
Pounds started into production during May		530,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		65,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	106,000
Conversion cost	$	59,700
Cost added during May:
Materials cost	$	551,120
Conversion cost	$	328,230

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.

Answer 1

1. Compute the equivalent units of production for materials and conversion for May.

Equivalent units of production (EUP)­ weighted average method
	Units	% Materials	EUP­ Materials	% Conversion	Conversion
Units completed and transferred out	553000	100.00%	553000	100.00%	553000
Ending goods in process ­ units	65000	60%	39000	40%	26000
Equivalent units of production	618000		592000		579000

2. Compute the cost per equivalent unit for materials and conversion for May.

Cost Per Equivalent unit of Production			Direct Material		Conversion
Costs of beginning goods in process			106000		59700
Costs incurred this period			551120		328230
Total Costs		Costs	657120	Costs	387930
Equivalent Unit of Production			592000		579000
Cost Per Equivalent unit of Production			1.11		0.67

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

Cost of Ending Work in Progress	EUP	Cost Per EUP	Total Cost
Direct Material	39000	1.11	43,290.00
Conversion	26000	0.67	17,420.00
Total Cost of Ending Work in Progress			60,710.00

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

Cost of Units Transferred out	EUP	Cost Per EUP	Total Cost
Direct Material	553000	1.11	613,830.00
Conversion	553000	0.67	370,510.00
Total Cost Transferred out			984,340.00