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		72,000
Pounds started into production during May		370,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 60% complete; conversion 40% complete		32,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	72,700
Conversion cost	$	48,800
Cost added during May:
Materials cost	$	377,960
Conversion cost	$	268,300

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	72000
Add: Pounds started during May	370000
Less: Ending inventory	-32000
Units completed and transferred out	410000
1
	Materials	Conversion
Units completed and transferred out	410000	410000
Work in process, ending:
32000 X 60%	19200
32000 X 40%		12800
Equivalent units of production	429200	422800
2
	Materials	Conversion
Work in process, May 1	72700	48800
Cost added during May	377960	268300
Total costs	450660	317100
Divide by Equivalent units of production	429200	422800
Cost per Equivalent unit	1.05	0.75
3
	Materials	Conversion	Total
Work in process, ending units	19200	12800
X Cost per Equivalent unit	1.05	0.75
Cost of ending work in process inventory	20160	9600	29760
4
	Materials	Conversion	Total
Units completed and transferred out	410000	410000
X Cost per Equivalent unit	1.05	0.75
Cost of Units completed and transferred out	430500	307500	738000
5
Cost Reconciliation:
Cost to be accounted for:
Cost of Beginning work in Process inventory	121500
Cost added to production during May	646260
Total Cost to be accounted for	767760
Cost accounted for as follows:
Cost of Units completed and transferred out	738000
Cost of ending work in process inventory	29760
Total Cost accounted for	767760