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 64,000 290,000 ? 24,000 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 $ 69,500 $ 23,500 $361,000 $129,320 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

Solution

	Material	Conversion
Equivalent Units of Production	3,44,400	3,39,600

.

	Material	Conversion
Cost per equivalent Unit	$                    1.25	$                   0.45

.

	Material	Conversion	Total
Ending Inventory	$ 18,000	$ 4,320	$ 22,320

.

	Material	Conversion	Total
Units Completed and transferred	$ 412,500	$ 148,500	$ 561,000

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 93,000
Cost incurred during period	$ 490,320
Total cost to be accounted for	$ 583,320
Costs accounted for as follows:
Cost of Units Transferred Out	$ 561,000
Cost of Ending Wip	$ 22,320
Total cost accounted for	$ 583,320

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	3,30,000			100%	3,30,000	100%	3,30,000
Closing WIP	24,000			60%	14,400	40%	9,600
Total	3,54,000			Total	3,44,400	Total	3,39,600

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 69,500	$ 23,500	$ 93,000
Cost incurred during period		$ 361,000	$ 129,320	$ 490,320
Total Cost to be accounted for		$ 430,500	$ 152,820	$ 583,320
Total Equivalent Units		3,44,400	3,39,600
Cost per Equivalent Units		$                   1.25	$                     0.45	$                1.70

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.25	14,400	$          18,000.00	3,30,000	$ 412,500
Conversion cost	$ 0.45	9,600	$             4,320.00	3,30,000	$      1,48,500.00
TOTAL	$ 583,320	TOTAL	$ 22,320	TOTAL	$ 561,000