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		67,000
Pounds started into production during May		320,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 75% complete; conversion 25% complete		27,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	78,500
Conversion cost	$	20,300
Cost added during May:
Materials cost	$	408,220
Conversion cost	$	111,730

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

Work in Process, Beginning	67000
Add: Pounds started during May	320000
Less: Ending inventory	-27000
Units completed and transferred out	360000
1
	Materials	Conversion
Units completed and transferred out	360000	360000
Work in process, ending:
27000 X 75%	20250
27000 X 25%		6750
Equivalent units of production	380250	366750
2
	Materials	Conversion
Work in process, May 1	78500	20300
Cost added during May	408220	111730
Total costs	486720	132030
Divide by Equivalent units of production	380250	366750
Cost per Equivalent unit	1.28	0.36
3
	Materials	Conversion	Total
Work in process, ending units	20250	6750
X Cost per Equivalent unit	1.28	0.36
Cost of ending work in process inventory	25920	2430	28350
4
	Materials	Conversion	Total
Units completed and transferred out	360000	360000
X Cost per Equivalent unit	1.28	0.36
Cost of Units completed and transferred out	460800	129600	590400
5
Cost Reconciliation:
Cost to be accounted for:
Cost of Beginning work in Process inventory	98800
Cost added to production during May	519950
Total Cost to be accounted for	618750
Cost accounted for as follows:
Cost of Units completed and transferred out	590400
Cost of ending work in process inventory	28350
Total Cost accounted for	618750