Question

Check my 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 76,000 410,000 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 36,000 $ 117,900 $ 53,600 5613,080 $ 294,700 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

Good units completed and transferred

= (beginning work in process + units started) - ending work in process

= (76,000 + 410,000) - 36,000 = 450,000 units

1 Equivalent units of conversion cost

= 450,000 + (36,000 × 40%) = 464,400 units

Equivalent units of material

= 450,000 + (36,000 × 60%) = 471,600 units

Equivalent unit of conversion cost is 464,400 and equivalent unit of material is 471,600 units.

2 Cost per equivalent unit of conversion cost

= (53,600 + 294,700) / 464,400 = $0.75

Cost per equivalent unit of material

= (117,900 + 613,080) / 471,600 = $1.55

3 COST ASSIGNED TO ENDING WORK IN PROCESS

Material = (36,000 × 60%) × 1.55 = $33,480

Conversion = (36,000 × 40%) × 0.75 = $10,800

Total cost assigned ending work in process

= 33,480 + 10,800 = $44,280

4 COST ASSIGNED TO UNITS COMPLETED AND TRANSFERRED OUT

Material = 450,000 × 1.55 = $697,500

Conversion = 450,000 × 0.75 = $337,500

Total cost assigned to units completed and transferred out

= 697,500 + 337,500 = $1,035,000

5 Cost reconciliation

Particulars	$
Beginning work in process inventory	171,500
Cost added during May	907,780
Total cost to be accounted	1,079,280
Cost assigned to ending work in process inventory	44,280
Cost assigned to units completed and transferred out	1,035,000
Total cost to be accounted	1,079,280

Weighted average method process costing calculations are presented above.

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