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	71,000
Pounds started into production during May	360,000
Pounds completed and transferred out
Pounds in process, May 31; materials 75% complete; conversion 25% complete	31,000
Cost data:
Work in process inventory, May 1:
Materials cost	90,100
Conversion cost	46,400
Cost added during May:
Materials cost	468,590
Conversion cost	255,335

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

Completed and Transferred Units :-

Particulars	Amount($)
Beginning WIP Inventory	71000
Add : Units Started During May	360000
Less : Ending WIP Inventory	(31000)
Completed and Transferred Unit	400000

1) Equivalent Units :-

Particulars	Materials	Conversion
Beginning WIP Inventory	71000	71000
Add : Started and Completed	360000	360000
Add : Ending WIP Inventory	23250	7750
Equivalent Units	454250	438750

2) Cost Per Equivalent Unit :-

Particulars	Materials	Conversion
Beginning WIP Inventory Cost	90100	46400
Current Costs	468590	255335
Total Cost	558690	301735
Divided By Equivalent Units	454250	438750
Cost of Equivalent Unit	1.23	0.69

3) Cost of Ending Work in Process inventory :-

Particulars	Calculation	Amount($)
Materials	(23250*$1.23)	28597.5
Conversion	(7750*$0.69)	5347.5
Cost of Ending WIP Inventory		33945

4) Cost of Completed and Transferred units :-

Particulars	Calculation	Amount($)
Materials	(400000*$1.23)	492000
Conversion	(400000*$0.69)	276000
Total		768000