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

Beginning WIP inventory	63000
Add: Units started during May	280000
Less: Ending inventory	23000
Units completed and transferred	320000
1		Equivalent Units
	Whole units	Materials	Conversion
Beginning WIP inventory	63000	63000	63000
Started & completed	257000	257000	257000
Ending inventory	23000	17250	5750
Units accounted for	343000	337250	325750
	Materials	Conversion
Equivalent units of production	337250	325750
2
Cost Data:	Total	Material	Conversion
Beginning WIP inventory	96600	67500	29100
Current costs	510525	350690	159835
Total cost to account for	607125	418190	188935
Divided by Equivalent units		337250	325750
Cost per Equivalent unit	1.82	1.24	0.58
	Materials	Conversion
Cost per Equivalent unit	1.24	0.58
3
Cost Assignment:
Ending Work in process:
Material	21390
Conversion	3335
Total Ending Work in process	24725
4
Cost of units completed and transferred
Material	396800
Conversion	185600
Total	582400
5
Cost to be accounted for:
Beginning WIP inventory	96600
Current costs	510525
Total costs to be accounted for	607125
Cost accounted for as follows:
Cost of units completed and transferred	582400
Cost of ending work in process	24725
Total costs accounted for	607125