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		69,000
Pounds started into production during May		340,000
Pounds completed and transferred out		?
Pounds in process, May 31; materials 80% complete; conversion 20% complete		15,000
Cost data:
Work in process inventory, May 1:
Materials cost	$	78,000
Conversion cost	$	15,300
Cost added during May:
Materials cost	$	405,140
Conversion cost	$	83,950

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

Production report using weight Average Method Physical units Units to be accounted for :- Beginning work in process Started into Production Total Units Accounted for 69000 (Given) 340000 (Given) 409000 1. Equivalent units for Material and Conversion cost Equivalent Unit Material Conversion Physical units Units to be accounted for:- Units Completed & transferred out Ending work in Process Total Units 394000 15000 409000 394000 12000 406000 394000 3000 given 397000 Units completed & transferred out = Beginning WIP + Startred into production - Ending WIP = 69000 + 340000 - 15000 = 394000 Ending WIP = Units in ending WIP * Percentage complete 15000 x 80% 15000 x 20% 2. Cost Per Equivalent Unit Material Conversion Total cost Cost To be accounted For:- Beginning work in process Cost added during month Total Cost 78,000 $ 405,140 $ 483,140 $ 15,300 $ 83,950 $ 99,250 $ 93,300 (Given) 489,090 (Given) 582,390 (A) Equivalent Units Cost per unit (B) (A)/(B) 406000 1.19 $ 397000 0.25 $ 1.44 3. cost of Ending work in Process Ending work in process: Material Conversion Total Cost of Ending Work in Process 14,280 750 (12000 units x $ 1.19) (3000 units x $ 0.25) $ 15,030 4.Cost of goods Transferred out Units Completed & Transferred out:- Material $ Conversion $ Total Cost of units completed & Transferred out 468,860 98,500 (394000 units x $1.19) (394000 units x $ 0.25) $ 567,360 5.Cost Reconcilliation report Total cost Cost accounted for:- Cost of beginning work in process $ 93,300 cost added to production during the period $ 489,090 Total cost to be accounted for $ 582,390 Cost accounted for :- | Cost of Units Completed & Transferred out $ 567,360 calculated above Cost of Ending work in process 15,030 calculated above Total cost to be accounted for $ 582,390