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		69,000
Pounds started into production during May		340,000
Pounds completed and transferred out		?
Pounds in process, May 31:       materials 80% complete; conversion 20% complete		15,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	78,000
Conversion cost	$	15,300
Cost added during May:
Materials cost	$	405,140
Conversion cost	$	83,950

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. (Do not round your intermediate calculations.)

  

Answer 1

		Builder Products, Inc.,
		Weighted Average Method
		Equivalent Unit of Production
			Material	Conversion
	1)	Units transfer to next department=(69000+340000-15000)	394000	394000
		Add: Ending WIP
		Material(15000*80%)	12000
		Conversion(15000*20%)		3000
		Equivalent Units of Production	406000	397000
		Cost Per Equivalent Units
			Material	Conversion
	2)	Cost of beginning WIP	$    78,000.00	$       15,300.00
		Cost added during the period	$ 405,140.00	$       83,950.00
		Total Cost	$ 483,140.00	$       99,250.00
		Equivalent Units of Production	406000	397000
		Cost Per Equivalent Units=($483140/406000),($99250/397000)	$               1.19	$                  0.25
		Cost of Ending WIP
	3)		Material	Conversion
		Ending WIP Inventory=(A)	12000	3000
		Cost per Equivalent Units=(B)	$               1.19	$                  0.25
		Cost of Ending WIP=(A)*(B)	$    14,280.00	$             750.00
		Cost of units completed and transferred
			Material	Conversion
		Units transfer to next department	394000	394000
		Cost per Equivalent Units	$               1.19	$                  0.25
		Cost of units completed and transferred	$ 468,860.00	$       98,500.00
		Cost reconciliation report
	4)	Cost to be accounted for
		Beginning WIP	$    78,000.00	$       15,300.00	(Given)
		Cost added during the month	$ 405,140.00	$       83,950.00	(Given)
		Total cost to be accounted for	$ 483,140.00	$       99,250.00
		Cost of Closing WIP	$    14,280.00	$             750.00
		Cost of units completed and transferred	$ 468,860.00	$       98,500.00
		Total cost to be accounted for	$ 483,140.00	$       99,250.00