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.

Materials conversion

equivalent units of production

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

Materials conversion

cost per equivalent unit

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

Materials conversion total

cost of ending work in process inventory

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

Materials conversion total

cost of units transferred out

5. Prepare a cost reconciliation report for May.

Cost Reconciliation

cost to be accounted for
Answer	answr
answr	answr
total cost to be accounted for
Costs accounted for as follows:
answr	answr
answr	answr
Total cost accounted for

Answer 1

Requirement 1

	Material	Conversion
Equivalent Units of Production	3,02,000	2,98,000

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$                    1.21	$                   0.51

Requirement 3

	Material	Conversion	Total
Ending Inventory	$ 14,520	$ 4,080	$ 18,600

Requirement 4

	Material	Conversion	Total
Units Completed and transferred	$ 350,900	$ 147,900	$ 498,800

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 82,400
Cost incurred during period	$ 435,000
Total cost to be accounted for	$ 517,400
Costs accounted for as follows:
Cost of Units Transferred Out	$ 498,800
Cost of Ending Wip	$ 18,600
Total cost accounted for	$ 517,400

Working

Reconciliation of Units
A	Opening WIP	60,000
B	Introduced	2,50,000
C=A+B	TOTAL	3,10,000
D	Transferred	2,90,000
E=C-D	Closing WIP	20,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	2,90,000			100%	2,90,000	100%	2,90,000
Closing WIP	20,000			60%	12,000	40%	8,000
Total	3,10,000			Total	3,02,000	Total	2,98,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 59,000	$ 23,400	$ 82,400
Cost incurred during period		$ 306,420	$ 128,580	$ 435,000
Total Cost to be accounted for		$ 365,420	$ 151,980	$ 517,400
Total Equivalent Units		3,02,000	2,98,000
Cost per Equivalent Units		$                   1.21	$                     0.51	$                1.72

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.21	12,000	$          14,520.00	2,90,000	$ 350,900
Conversion cost	$ 0.51	8,000	$             4,080.00	2,90,000	$      1,47,900.00
TOTAL	$ 517,400	TOTAL	$ 18,600	TOTAL	$ 498,800