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		60,000
Pounds started into production during May		250,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		20,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	59,000
Conversion cost	$	23,400
Cost added during May:
Materials cost	$	306,420
Conversion cost	$	128,580

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

	Beginning work in process			60,000	Completed & Transferred			290,000
	pounds started in production			250,000	ending work in process			20,000
	units to be accounted			310,000	units accounted for			310,000
1)	Equivalent units of production
				units	%	materials	%	CC
	Completed & Transferred			290,000	100%	290,000	100%	290,000
	ending work in process			20,000	60%	12000	40%	8000
	Equivalent units of production					302,000		298,000
2)	Cost per unit
					Materials	CC	Total
	Beginning work in proces				59000	23,400	82400
	cost added during the year				306,420	128,580	435,000
	total cost				365420	151,980	517400
	equivalent units				302,000	298,000
	cost per unit				1.21	0.51	1.72
3)	cost of ending work in process inventory
	Materials	12000*1.21			14520
	CC	8000*.51			4080
	cost of ending WIP				18600
4)	cost of units tranferred out
	290000 units *1.72=				498800
5)	cost reconcilation report
	costs to be accouted
	Beginning WIP				82,400
	cost added during the year				435,000
	cost to be accounted				517,400
	cost accounted for
	Completed & transferred				498,800
	ending WIP				18,600
	cost accounted for				517,400