Question

Problem 4-16 Comprehensive Problem-Weighted Average Method (L04-2, L04-3, L04-4, L04-5) 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 88,000 530,000 ? Production data Pounds in process, May 1: materials 100% complete; conversion 908 complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 60% complete; conversion 40% complete Cost datal Work in process inventory, May 11 Materials cost Conversion cout Cost added during May Materials cost Conversion cost 65,000 $ 106,000 $ 59,700 $551,120 $328,230 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 Proy 1 of 1 Next

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	592,000	579,000

.

	Material	Conversion
Cost per equivalent Unit	$ 1.11	$ 0.67

.

	Material	Conversion	Total
Ending Inventory	$ 43,290	$ 17,420	$ 60,710

.

	Material	Conversion	Total
Units Completed and transferred	$ 613,830	$ 370,510	$ 984,340

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 165,700
Cost incurred during period	$ 879,350
Total cost to be accounted for	$ 1,045,050
Costs accounted for as follows:
Cost of Units Transferred Out	$ 984,340
Cost of Ending Wip	$ 60,710
Total cost accounted for	$ 1,045,050

Working

Reconciliation of Units
A	Beginning WIP	88,000
B	Introduced	530,000
C=A+B	TOTAL	618,000
D	Transferred out	553,000
E=C-D	Ending WIP	65,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	553,000			100%	553,000	100%	553,000
Ending WIP	65,000			60%	39,000	40%	26,000
Total	618,000			Total	592,000	Total	579,000

..

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 106,000	$ 59,700	$ 165,700
Cost incurred during period (B)		$ 551,120	$ 328,230	$ 879,350
Total Cost to be accounted for (C=A+B)		$ 657,120	$ 387,930	$ 1,045,050
Total Equivalent Units(D)		592,000	579,000
Cost per Equivalent Units (E=C/D)		$ 1.11	$ 0.67	$ 1.78

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.11	39,000	$          43,290.00	553,000	$        613,830.00
Conversion	$ 0.67	26,000	$          17,420.00	553,000	$        370,510.00
TOTAL	$ 1,045,050	TOTAL	$ 60,710	TOTAL	$ 984,340