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 60,000 Pounds started into production during May 250,000 Pounds completed and transferred out Pounds in process, May 31; materials 608 complete; conversion 40% complete 20,000 Cost data: Work in process inventory, May 1: Materials cost $ 59,000 Conversion cost $ 23,400 Cost added during May: Materials cost $306, 420 Conversion cost $128,580 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. Complete this question by entering your answers in the tabs below. Required Required Required Required Required 3 Compute the equivalent units of production for materials and conversion for May. Materials Conversion Equivalent units of production < Required Required 2 >

Answer 1

Pounds completed and transferred = 60000+250000-20000 = 290000 pounds

1. Equivalent units of Production = Pounds transferred + Ending WIP x Completion
Material = 290000 + 20000 x 60% = 302000 pounds
Conversion = 290000 + 20000 x 40% = 298000 pounds

2. Cost per Equivalent unit = (Beginning Cost + Cost added) / Equivalent units
Material = ($59000+306420)/302000 = $1.21 per pound
Conversion = ($23400+128580)/298000 = $0.51 per pound

3. Cost of Ending Work in Process
Material = 20000 x 60% x $1.21 = $14520
Conversion = 20000 x 40% x $0.51 = $4080
Total Cost of Ending Work in Process = $18600

4. Cost of Units transferred out
Material = 290000 x $1.21 = $350900
Conversion = 290000 x $0.51 = $147900
Total Cost of Ending Work in Process = $498800

5.

Reconciliation of Costs
Costs to be accounted for
Beginning WIP	$        82,400
Cost added	$     4,35,000
Total Costs to be accounted for	$     5,17,400
Costs accounted for
Ending WIP	$        18,600
Units transferred	$     4,98,800
Total Costs accounted for	$     5,17,400