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Builder Products, Inc. manufactures a caulking compound that goes through three processing stages prior to completion....

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 16,600
Units started into production during May 126,000
Units completed and transferred out 116,000
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 $ 2,800
Labour cost 3,680
Overhead cost 7,600
Cost added during May:
Materials cost 192,000
Labour cost 36,800
Overhead cost 89,200

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 "$27" 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 "$27" 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"".

Solutions

Expert Solution

1 to 3

Physical units Material Labor Overhead
Work in Process Beginning 16600
Started during the period 126000
To account for 142600
Units transferred 116000 116000 116000 116000
Work in Process Ending 26600 15960 5320 5320
Accounted for 142600
Equivalent units 131960 121320 121320
Material Labor Overhead Total
Cost of Beginning Work in Process $          2,800 $           3,680 $             7,600 $         14,080
Cost added during the period $     192,000 $         36,800 $           89,200 $       318,000
Total Cost to account for $     194,800 $         40,480 $           96,800 $       332,080
Equivalent units of Production 131960 121320 121320
Cost per equivalent unit $          1.476 $           0.334 $             0.798 $           2.608
Material Labor Overhead Total
Units Completed and transferred out
Units transferred to next department 116000 116000 116000
Cost per equivalent unit $          1.476 $           0.334 $             0.798
Cost of units transferred out $     171,216 $         38,744 $           92,568 $       302,528
Material Labor Overhead Total
Ending work in Process Inventory
Equivalent units of Production 15960 5320 5320
Cost per equivalent unit $          1.476 $           0.334 $             0.798
Cost of Ending work in Process Inventory $       23,557 $           1,777 $             4,245 $         29,579
Total Costs Accounted for $     194,773 $         40,521 $           96,813 $       332,107
Reconciliation
Costs to be accounted for :
   Cost of beginning work in process inventory $        14,080
Costs added to the production during the year $     318,000
   Total Costs to be accounted for $     332,080
Cost of Ending work in Process Inventory $     302,528
Cost of units transferred out $        29,579
   Total Costs accounted for $     332,107


4.

Physical units Material Labor Overhead
Work in Process Beginning 16600
Started during the period 126000
Total Units to account for 142600
Work in Process Beginning 16600 0 3320 3320
Units started and completed 99400 99400 99400 99400
Units transferred to next department 116000 99400 102720 102720
Ending Work in Process : 26600 15960 5320 5320
Total Units Accounted for 142600
Equivalent units 115360 108040 108040
Material Labor Overhead Total
Cost added during the period $       192,000 $         36,800 $         89,200 $       318,000
Equivalent units of Production 115360 108040 108040
Cost per equivalent unit $           1.664 $           0.341 $           0.826 $           2.831
Material Labor Overhead Total
Units Completed and transferred out
Cost of Work on Beginning Work in Process $           2,800 $           3,680 $           7,600 $         14,080
Cost of work on Beginning Work in Process $                  -   $           1,132 $           2,742 $           3,874
Total Cost of Beginning WIP $           2,800 $           4,812 $         10,342 $         17,954
ekkarill92 answered 1 year ago
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