Question

SHOW WORK PLEASE

Problem 4-16 Comprehensive Problem-Weighted-Average Method [LO4-2, LO4-3, LO4-4, LO4-5]

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

1. Compute the equivalent units of production for materials and conversion for May.

Unit transferred out = 76000+410000-36000 = 450000

Equivalent unit of material = 450000+(36000*60%) = 471600

Equivalent unit of conversion = 450000+(36000*40%) = 464400

2. Compute the cost per equivalent unit for materials and conversion for May.

Material = (117900+613080)/471600 = 1.55

Conversion = (53600+294700)/464400 = 0.75

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

	Material	Conversion	Total
Cost of ending work in process	21600*1.55 = 33480	14400*.75 = 10800	44280

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

	Material	Conversion	Total
Cost of units transferred out	450000*1.55 = 697500	450000*.75 = 337500	1035000

5. Prepare a cost reconciliation report for May.

Cost to be accounted for
Beginning work in process	171500
Cost added	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