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		64,000
Pounds started into production during May		290,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		24,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	69,500
Conversion cost	$	23,500
Cost added during May:
Materials cost	$	361,000
Conversion cost	$	129,320

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.

Please show the work and not just the answer. Please and Thank you!

Answer 1

Weighted-Average Method
1
Equivalent units of production	Materials	Conversion
Transferred to next department*	3,30,000	3,30,000
Ending work in process:
Materials: 24,000 units x 60% complete	14,400
Conversion: 24,000 units x 40% complete		9,600
Equivalent units of production	3,44,400	3,39,600
*Units transferred to the next department = Units in beginning work in process + Units started into production − Units in ending work in process = 64,000 + 290,000 − 24,000 = 330,000
2
Cost per equivalent unit	Materials	Conversion
Cost of beginning work in process	69,500	23,500
Cost added during the period	3,61,000	1,29,320
Total cost (a)	430500	152820
Equivalent units of production (b)	3,44,400	3,39,600
Cost per equivalent unit, (a) ÷ (b)	1.25	0.45
3
Cost of ending work in process inventory and units transferred out
	Materials	Conversion	Total
Ending work in process inventory:
Equivalent units of production	14,400	9,600
Cost per equivalent unit	1.25	0.45
Cost of ending work in process inventory	18000	4320	22320
4
Units completed and transferred out:
Units transferred to the next department	3,30,000	3,30,000
Cost per equivalent unit	1.25	0.45
Cost of units completed and transferred out	412500	148500	561000
5
Cost Reconciliation
Costs to be accounted for:
Cost of beginning work in process inventory	93000
($69,500 + $23,500)
Costs added to production during the period	4,90,320
($361,000 + $129,320)
Total cost to be accounted for	583320
Costs accounted for as follows:
Cost of ending work in process inventory	22320
Cost of units completed and transferred out	5,61,000
Total cost accounted for	583320