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 75,000 Pounds started into production during May 400,000 Pounds completed and transferred out ?Pounds in process, May 31; materials 75% complete;
conversion 25% complete 35,000 Cost data:  Work in process inventory, May 1:  Materials cost$102,300 Conversion cost$45,600 Cost added during May:  Materials cost$531,800 Conversion cost$250,575

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

Solution

	Material	Conversion
Equivalent Units of Production	466,250	448,750

.

	Material	Conversion
Cost per equivalent Unit	$                    1.36	$                   0.66

.

	Material	Conversion	Total
Ending Inventory	$ 35,700	$ 5,775	$ 41,475

.

	Material	Conversion	Total
Units Completed and transferred	$ 598,400	$ 290,400	$ 888,800

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 147,900
Cost incurred during period	$ 782,375
Total cost to be accounted for	$ 930,275
Costs accounted for as follows:
Cost of Units Transferred Out	$ 888,800
Cost of Ending Wip	$ 41,475
Total cost accounted for	$ 930,275

Working

Reconciliation of Units
A	Beginning WIP	75,000
B	Introduced	400,000
C=A+B	TOTAL	475,000
D	Transferred out	440,000
E=C-D	Ending WIP	35,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	440,000			100%	440,000	100%	440,000
Ending WIP	35,000			75%	26,250	25%	8,750
Total	475,000			Total	466,250	Total	448,750

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 102,300	$ 45,600	$ 147,900
Cost incurred during period		$ 531,800	$ 250,575	$ 782,375
Total Cost to be accounted for		$ 634,100	$ 296,175	$ 930,275
Total Equivalent Units		466,250	448,750
Cost per Equivalent Units		$                   1.36	$                     0.66	$                2.02

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.36	26,250	$          35,700.00	440,000	$        598,400.00
Conversion cost	$ 0.66	8,750	$             5,775.00	440,000	$        290,400.00
TOTAL	$ 930,275	TOTAL	$ 41,475	TOTAL	$ 888,800