Question

Problem 4-16 Comprehensive Problem-Weighted-Average Method (L04-2, LO4-3, L04-4, LO4-5) Builder Products, Inc., 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: 67,000 320,000 27,000 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 75% complete; conversion 25% complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost $78,500 $ 20,300 $ 408,220 $ 111,730 The company uses the weighted average method.

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	380,250	366,750

.

	Material	Conversion
Cost per equivalent Unit	$                    1.28	$                   0.36

.

Cost of units Transferred out	$             590,400
cost of units in ending Work in process	$                28,350

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 98,800
Cost incurred during period	$ 519,950
Total cost to be accounted for	$ 618,750
Costs accounted for as follows:
Cost of Units Transferred Out	$ 590,400
Cost of Ending Wip	$ 28,350
Total cost accounted for	$ 618,750

Working

Reconciliation of Units
A	Beginning WIP	67,000
B	Introduced	320,000
C=A+B	TOTAL	387,000
D	Transferred out	360,000
E=C-D	Ending WIP	27,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	360,000			100%	360,000	100%	360,000
Ending WIP	27,000			75%	20,250	25%	6,750
Total	387,000			Total	380,250	Total	366,750

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 78,500	$ 20,300	$ 98,800
Cost incurred during period		$ 408,220	$ 111,730	$ 519,950
Total Cost to be accounted for		$ 486,720	$ 132,030	$ 618,750
Total Equivalent Units		380,250	366,750
Cost per Equivalent Units		$                   1.28	$                     0.36	$                1.64

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.28	20,250	$          25,920.00	360,000	$        460,800.00
Conversion cost	$ 0.36	6,750	$             2,430.00	360,000	$        129,600.00
TOTAL	$ 618,750	TOTAL	$ 28,350	TOTAL	$ 590,400