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		76,000
Pounds started into production during May		410,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		36,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	117,900
Conversion cost	$	53,600
Cost added during May:
Materials cost	$	613,080
Conversion cost	$	294,700

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

equivalent unit :

	Physical unit	%	Material	%	conversion cost
Unit completed and transferred out	450000	100%	450000	100%	450000
Ending work in process	36000	60%	21600	40%	14400
Total equivalent unit			471600		464400

Calculate cost per equivalent unit :

	Material	conversion cost
Beginning work in process	117900	53600
Cost added during period	613080	294700
Total cost	730980	348300
Equivalent unit	471600	464400
Cost per equivalent unit	1.55	0.75

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

	Ending work in process
Material (21600*1.55)	33480
Conversion cost (14400*.75)	10800
Cost of ending work in process	44280

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

	Units transferred out
Material (450000*1.55)	697500
Conversion cost (450000*.75)	337500
Total cost of units transferred out	1035000

5. Prepare a cost reconciliation report for May.

Cost to be accounted for
Beginning work in process	171500
Cost added during period	907780
Total cost to be accounted for	1079280
Cost accounted as
Cost of units transferred out	1035000
Cost of ending work in process	44280
Total cost accounted as	1079280