Question

Problem 4-16 Comprehensive Problem-Weighted-Average Method (L04-2, LO4-3, LO4-4, 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: 72,000 370,000 32,000 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 60% complete; conversion 40% complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost $ 72,700 $ 48,800 $ 377,960 $ 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

Weighted average method :
Beginning work in process units	72000
(+) Units started during May	370000
(-) Ending work in process units	32000
Units completed and transferred out	410000

Required 1 :
	Materials	Conversion
Units completed and transferred out	410000	410000
(+) Equivalent ending work in process [ Ending work in process units * % Completion ]	19200	12800
Equivalent units of production	429200	422800

Required 2 :
	Materials	Conversion
Beginning work in process cost	72700	48800
(+) Cost added during May	377960	268300
Total cost	450660	317100
(/) Equivalent units of production	429200	422800
Cost per equivalent unit	1.05	0.75

Required 3 :
	Materials	Conversion	Total
Cost of ending work in process inventory [ Equivalent ending work in process * Cost per equivalent unit ]	20160	9600	29760

Required 4 :
	Materials	Conversion	Total
Cost of units completed and transferred out [ Units completed and transferred out * Cost per equivalent unit ]	430500	307500	738000

Required 5 :
Cost Reconciliation
Cost to be accounted for :
Cost of beginning work in process inventory ( 72700 + 48800 )	121500
Costs added to production during the period ( 377960 + 268300 )	646260
Total cost to be accounted for	767760
Costs accounted for as follows :
Cost of ending work in process inventory	29760
Cost of units completed and transferred out	738000
Total cost accounted for	767760