Question

Builder Products, Inc., uses the weighted-average method in its process costing system. It 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 80,000 Pounds started into production during May 450,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 60% complete; conversion 40% complete 40,000 Cost data: Work in process inventory, May 1: Materials cost $ 116,900 Conversion cost $ 35,800 Cost added during May: Materials cost $ 607,840 Conversion cost $ 196,960 Required: 1. Compute the equivalent units of production for materials and conversion for May. 2. Compute the cost per equivalent unit for materials and conversion for May. 3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May. 4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. 5. Prepare a cost reconciliation report for May.

Answer 1

1.

	Materials	Conversion
Equivalent units of production	514000	506000

	Physical Units
Beginning Work in process	80000
Units started in Production	450000
Total Units to account for	530000
	Physical Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
Units completed and transferred out	490000	100%	490000	100%	490000
Ending Work in process	40000	60%	24000	40%	16000
Total Units accounted for	530000		514000		506000

2.

	Materials	Conversion
Cost per equivalent unit $	1.41	0.46

Cost per EUP			Materials		Conversion
Cost of beginning work in process			116900		35800
Costs incurred in May			607840		196960
Total costs		Costs	724740	Costs	232760
÷ Equivalent units of production		EUP	514000	EUP	506000
Cost per equivalent unit of production $			1.41		0.46

3.

	Materials	Conversion	Total
Cost of ending work in process inventory $	33840	7360	41200

Costs of ending work in process	EUP	Cost per EUP	Total cost
Materials	24000	1.41	33840
Conversion	16000	0.46	7360
Total ending work in process				41200

4.

	Materials	Conversion	Total
Cost of units transferred out to next department $	690900	225400	916300

Costs transferred out	EUP	Cost per EUP	Total cost
Materials	490000	1.41	690900
Conversion	490000	0.46	225400
Total transferred out				916300

5.

Cost Reconciliation Report
For the Month of May
Costs to be accounted for:
Costs of beginning work in process	152700
Costs added during the month	804800
Total cost to be accounted for $	957500
Costs accounted for as follows:
Cost of ending work in process inventory	41200
Cost of units completed and transferred out	916300
Total cost accounted for $	957500