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: 89,000 540,000 60,000 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 80% complete; conversion 20% complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost $ 124,400 $ 61,700 $646,850 $339,190 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

1)

Units completed and transferred out =Beginning+Started -ending work in process

                                          = 89000+540000-60000

                                          = 569000

	Material	conversion
Units completed and transferred out	569000	569000
Ending work in process inventory ,May 31	60000*80%=48000	60000*20%= 12000
Equivalent unit of production	617000	581000

2)

	Material	conversion
Work in process beginning May 1	124400	61700
Current period cost	646850	339190
Total cost to account for (i)	771250	400890
Equivalent unit of production (ii)	617000	581000
cost per equivalent unit (i/ii)	1.25	.69

3)

	Equivalent unit	cost per equivalent unit	Total
Material	48000	1.25	60000
conversion	12000	.69	8280
Total cost of ending work in process			68280

4)

	Equivalent unit	cost per equivalent unit	Total
Material	569000	1.25	711250
conversion	569000	.69	392610
Total cost of units completed and transferred out			1103860

5)

COST RECONCILIATION
Beginning work in process May 1 [124400+61700]	186100
current period cost [646850+339190]	986040
Total cost to account for	1172140
Cost accounted for
cost of units completed and transferred out	1103860
Cost of ending work in process	68280
Total cost accounted for	1172140