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 83,000 Pounds started into production during May 480,000 Pounds completed and transferred out ? Pounds in process, May 31: materials 75% complete; conversion 25% complete 43,000 Cost data: Work in process inventory, May 1: Materials cost $ 128,300 Conversion cost $ 53,900 Cost added during May: Materials cost $ 666,940 Conversion cost $ 296,395 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. (Round your intermediate calculations to 2 decimal places.)

Answer 1

Solution 1:

Computation of Equivalent unit of Production - Weighted Average - First Department
Particulars	Physical Units	Material	Conversion
Unit completed & Transferred out (83000+480000-43000)	520000	520000	520000
Closing WIP:	43000
Material (75%)		32250
Conversion (25%)			10750
Equivalent units of production	563000	552250	530750

Solution 2:

Computation of Cost per equivalent unit of Production - Weighted Average - First Department
Particulars	Material	Conversion
Opening WIP	$128,300.00	$53,900.00
Cost Added during May	$666,940.00	$296,395.00
Total cost to be accounted for	$795,240.00	$350,295.00
Equivalent units of production	552250	530750
Cost per Equivalent unit	$1.44	$0.66

Solution 3:

Computation of Cost of ending WIP and units completed & transferred out - Weighted Average - First department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	32250	10750
Cost per equivalent unit	$1.44	$0.66
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$46,440	$7,095	$53,535
Units completed and transferred	520000	520000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$748,800	$343,200	$1,092,000

Solution 4:

Production cost report - Weighted Average - First Department
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory ($128,300 + $53,900)	$182,200.00
Cost added to production ($666,940 + $296,395)	$963,335.00
Total Cost to be accounted for	$1,145,535.00
Costs accounted for as follows:
Cost of unit transferred out	$1,092,000
Ending WIP:
Material	$46,440
Converison	$7,095
Total cost accounted for	$1,145,535