Question

Problem 4-16 Comprehensive Problem-Weighted Average Method [LO4-2, LO4-3, L04-4, LO4-5) 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 87.000 520,000 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 25complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost 47,000 $142, 100 $ 63, 300 $738,870 $348, 360 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

1.Equivalent units of production - weighted average Units completed and transferred out =87000+520000-47000 Units of ending goods in process Equivalent units of production Units % Material EUP- Material % conversion (EUP- conversion ab la*c 560,0001 100% 560,000 100% 560,000 47.000 75% 35,250 25% 11,750 595,250 571,750 2.Cost per equivalent unit of production Cost of beginning goods in process Costs incurred this period Total costs • Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Material 142100 73 8870 880970 Costs 595,250 EUP 1.48 conversion 63,300 348,360 411660 571,750 0.72 Costs EUP 3. Costs of ending goods in process Material conversion Total cost of ending goods in process EUP Cost per EUP Total cost 35,250 1.48 52,170 11,750 0.72 8,460 60,630 4.Cost of units transferred out: EUP Cost per EUP Total cost Material conversion Total costs transferred out 560,000 560,000 1.48 0.72 828,800 403,200 1,232,000 5) cost reconciliation cost to be accounted for : Costs in beginning work in process (142100+63 300) Costs added during the period (738870+348360) total cost to be accounted for Costs accounted for: Goods transferred out Ending work in process total Costs accounted for: 205,400 1,087,230 1292630 1,232,000 60,630 1,292,630