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		15,100
Units started into production during May		111,000
Units completed and transferred out		101,000
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	$	2,050
Labour cost		2,480
Overhead cost		6,100
Cost added during May:
Materials cost		162,000
Labour cost		24,800
Overhead cost		71,200

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.

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

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 difference of "$101" 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"".

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

Cost per Equivalent Unit

Cost Reconciliation

Note: There is difference of "$101" 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"".

Answer 1

1) Calculation of Equivalent Units :-

Particulars	Materials	Conversion
Transfer to Next Dept.	101000	101000
Ending Inventory
Materials (25100*60%)	15060
Conversion (25100*20%)		5020
Equivalent Units	116060	106020

Ending Inventory = Beginning + Production - Transfer to Next Dept.

= 15100 + 111000 - 101000

= 25100

2) Cost Per Equivalent Unit :-

Particulars	Materials	Conversion
Beginning Cost	$2050	($2480+$6100)= $8580
Cost Added During The Period	$162000	($24800+$71200)= $96000
Total Cost (A)	$164050	$104580
Equivalent Units (B)	116060	106020
Cost Per Equivalent Unit (A/B)	$1.413	$0.986

3) Cost Reconciliation :-

Particulars	Amount
Costs to be accounted for :-
Cost of beginning WIP inventory ($2050+$2480+$6100)	$10630
Costs added to production during the period ($162000+$24800+$71200)	$258000
Total Cost to be accounted for	$268630
Cost accounted for :-
Cost of Ending WIP inventory (15060*$1.413)+(5020+$0.986)	$26230
Cost of Units Completed and Transfered Out (101000*($1.413+$0.986))	$242400
Total Cost accounted for	$268630