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		63,000
Pounds started into production during May		280,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 75% complete; conversion 25% complete		23,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	67,500
Conversion cost	$	29,100
Cost added during May:
Materials cost	$	350,690
Conversion cost	$	159,835

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.

	Materials	Conversion
Equivalent units of production	337250	325750

2.

	Materials	Conversion
Cost per equivalent unit $	1.24	0.58

3.

	Materials	Conversion	Total
Cost of ending work in process inventory $	21390	3335	24725

4.

	Materials	Conversion	Total
Cost of units completed and transferred out $	396800	185600	582400

5.

Cost Reconciliation
Costs to be accounted for:
Costs of beginning work in process	96600
Costs incurred this period	510525
Total cost to be accounted for $	607125
Costs accounted for as follows:
Cost of ending work in process inventory	24725
Cost of units completed and transferred out	582400
Total cost accounted for $	607125

Working:

	Physical Units
Beginning Work in process	63000
Units started in Production	280000
Total Units to account for	343000

	Physical Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
Units completed and transferred out	320000	100%	320000	100%	320000
Ending Work in process	23000	75%	17250	25%	5750
Total Units accounted for	343000		337250		325750

Cost per EUP			Materials		Conversion
Cost of beginning work in process			67500		29100
Costs incurred in May			350690		159835
Total costs		Costs	418190	Costs	188935
÷ Equivalent units of production		EUP	337250	EUP	325750
Cost per equivalent unit of production			1.24		0.58

Costs transferred out	EUP	Cost per EUP	Total cost
Materials	320000	1.24	396800
Conversion	320000	0.58	185600
Total transferred out				582400
Costs of ending work in process	EUP	Cost per EUP	Total cost
Materials	17250	1.24	21390
Conversion	5750	0.58	3335
Total ending work in process				24725
Total costs accounted for				607125