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: 81,000 460,000 55,000 Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 80% complete; conversion 20% complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost $ 158,200 $ 50,500 $822,300 $277,520 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

Weighted average method :
Beginning work in process units	81000
(+) Units started during May	460000
(-) Ending work in process units	55000
Units completed and transferred out	486000

Required 1 :
	Materials	Conversion
Units completed and transferred out	486000	486000
(+) Equivalent ending work in process [ Ending work in process units * % Completion ]	44000	11000
Equivalent units of production	530000	497000

Required 2 :
	Materials	Conversion
Beginning work in process cost	158200	50500
(+) Cost added during May	822300	277520
Total cost	980500	328020
(/) Equivalent units of production	530000	497000
Cost per equivalent unit	1.85	0.66

Required 3 :
	Materials	Conversion	Total
Cost of ending work in process inventory [ Equivalent ending work in process * Cost per equivalent unit ]	81400	7260	88660

Required 4 :
	Materials	Conversion	Total
Cost of units completed and transferred out [ Units completed and transferred out * Cost per equivalent unit ]	899100	320760	1219860

Required 5 :
Cost Reconciliation
Cost to be accounted for :
Cost of beginning work in process inventory ( 158200 + 50500 )	208700
Costs added to production during the period ( 822300 + 277520 )	1099820
Total cost to be accounted for	1308520
Costs accounted for as follows :
Cost of ending work in process inventory	88660
Cost of units completed and transferred out	1219860
Total cost accounted for	1308520