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 ; 55,000 330,000 conversion 908 complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 60% complete ; con version 40% complete 15,000 Cost data: Work in process inventory, May 1: Materials cost Conversion cost 78,900 $23,700 Cost added during May: Materials cost Conversion cost $410,010 $130,460 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

Requirement 1

	Material	Conversion
Equivalent Units of Production	3,79,000	3,76,000

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$             1.29	$                 0.41

Requirement 3 and 4

	Material	Conversion	Total
Units Completed	$     4,77,300	$         1,51,700	$           6,29,000
Ending Inventory	$        11,610	$               2,460	$               14,070

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$     1,02,600.00
Cost incurred during period	$     5,40,470.00
Total cost to be accounted for	$     6,43,070.00
Costs accounted for as follows:
Cost of Units Transferred Out	$     6,29,000.00
Cost of Ending Wip	$       14,070.00
Total cost accounted for	$     6,43,070.00

.

Working

Reconciliation of Units
A	Opening WIP	55,000
B	Introduced	3,30,000
C=A+B	TOTAL	3,85,000
D	Transferred	3,70,000
E=C-D	Closing WIP	15,000

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	3,70,000	100%	3,70,000	100%	3,70,000
Closing WIP	15,000	60%	9,000	40%	6,000
Total	3,85,000	Total	3,79,000	Total	3,76,000

Cost per Equivalent Units
COST		Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost		$             78,900	$               23,700	$               1,02,600
Cost incurred during period		$         4,10,010	$           1,30,460	$               5,40,470
Total Cost to be accounted for		$         4,88,910	$           1,54,160	$               6,43,070
Total Equivalent Units		3,79,000	3,76,000
Cost per Equivalent Units		$                 1.29	$                    0.41

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$                     1.29	9,000	$         11,610.00	3,70,000	$       4,77,300.00
Conversion Cost	$                     0.41	6,000	$           2,460.00	3,70,000	$       1,51,700.00
TOTAL	$             6,43,070	TOTAL	$               14,070	TOTAL	$             6,29,000