Question

In: Accounting

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 15,000
Units started into production during May 110,000
Units completed and transferred out 100,000
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 $ 2,000
Labour cost 2,400
Overhead cost 6,000
Cost added during May:
Materials cost 160,000
Labour cost 24,000
Overhead cost 70,000

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 "$10" 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 "$10" 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

PART 1

Quantity Schedule & Calculation of Equivalent Units

Quantities

Physical Units

% Completed

EQ. Units Materials

% Completed

EQ. Units Conversion Costs

Units to be Accounted For:

Work-In-Process - July 1

15000

Started into Production

110000

Total Units to Account For

125000

Units Accounted For

Completed & Transferred Out

100000

1.00

100000

1.00

100000

Work-In-Process - July 31

25000

0.60

15000

0.20

5000

Total Units

125000

115000

105000

PART 2

Computation Of Cost Per Equivalent Unit

Materials

Conversion Costs

Total Costs

Unit Costs

Total Costs

162000

102400

264400

Equivalent Units

115000

105000

Cost per Equivalents Unit

1.409

0.975

2.384

Costs to be Accounted For

Work-In-Process July 1

2000

8400

10400

Started into Production

160000

94000

254000

Total Costs to be Accounted For

162000

102400

264400

PART 3

Cost Reconciliation Schedule

Costs Accounted For

Transferred out

Completed & Transferred Out

238400

238400

Work In Process Inventory March 31

Materials

21135

Conversion Costs

4875

26010

Total Cost Accounted For

264410

Note : Due to Rounding of there is a difference of $10 between "cost accounted for" & Cost To Account For"

PART 4

Calculation of Equivalent Units

Quantities

Physical Units

% Completed

EQ. Units Materials

% Completed

EQ. Units Conversion Costs

Units to be Accounted For:

Work-In-Process - July 1

15000

Started into Production

110000

Total Units to Account For

125000

Units Accounted For

Beginning WIP Completed

15000

0.00

0

0.20

3000

Completed & Transferred Out

85000

1.00

85000

1.00

85000

Work-In-Process - July 31

25000

0.60

15000

0.20

5000

Total Units

125000

100000

93000

Computation Of Cost Per Equivalent Unit

Materials

Conversion Costs

Total Costs

Unit Costs

Costs Added In May

160000

94000

254000

Equivalent Units

100000

93000

Cost per equivalents Unit

1.600

1.011

2.611

Costs to be Accounted For

Work-In-Process July 1

2000

8400

10400

Started into Production

160000

94000

254000

Total Costs to Account For

162000

102400

264400

Cost Reconciliation Schedule

Costs Accounted For

Transferred out

Work-In-Process March 1

10400

Related Solutions

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:    Pounds in process, May 1; materials       100% complete; conversion 90% complete 63,000        Pounds started into production during May 280,000        Pounds completed and transferred out ?        Pounds in process, May 31:       materials 75% complete; conversion 25% complete 23,000      Cost data:     Work in process inventory, May 1:...
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:    Pounds in process, May 1; materials       100% complete; conversion 90% complete 85,000        Pounds started into production during May 500,000        Pounds completed and transferred out ?        Pounds in process, May 31:       materials 80% complete; conversion 20% complete 45,000      Cost data:     Work in process inventory, May 1:...
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:    Pounds in process, May 1; materials       100% complete; conversion 90% complete 85,000        Pounds started into production during May 500,000        Pounds completed and transferred out ?        Pounds in process, May 31:       materials 80% complete; conversion 20% complete 45,000      Cost data:     Work in process inventory, May 1:...
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:    Pounds in process, May 1; materials       100% complete; conversion 90% complete 77,000        Pounds started into production during May 420,000        Pounds completed and transferred out ?        Pounds in process, May 31:       materials 80% complete; conversion 20% complete 37,000      Cost data:     Work in process inventory, May 1:...
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:    Pounds in process, May 1; materials       100% complete; conversion 90% complete 77,000        Pounds started into production during May 420,000        Pounds completed and transferred out ?        Pounds in process, May 31:       materials 80% complete; conversion 20% complete 37,000      Cost data:     Work in process inventory, May 1:...
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 15,800 Units started into production during May 118,000 Units completed and transferred out 108,000 Units in process, May 31: 60% complete as to materials and 20% complete as to labour and...
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 15,600 Units started into production during May 116,000 Units completed and transferred out 106,000 Units in process, May 31: 60% complete as to materials and 20% complete as to labour and...
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:    Pounds in process, May 1; materials       100% complete; conversion 90% complete 90,000        Pounds started into production during May 550,000        Pounds completed and transferred out ?        Pounds in process, May 31:       materials 70% complete; conversion 30% complete 50,000      Cost data:     Work in process inventory, May 1:...
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: 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...
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:    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:...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT