Question

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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: 69,000 340,000 ? 15,000 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 $ 78,000 $ 15,300 $405,140 $ 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

Solution

	Material	Conversion
Equivalent Units of Production	406,000	397,000

.

	Material	Conversion
Cost per equivalent Unit	$                    1.19	$                   0.25

.

	Material	Conversion	Total
Ending Inventory	$ 14,280	$ 750	$ 15,030

.

	Material	Conversion	Total
Units Completed and transferred	$ 468,860	$ 98,500	$ 567,360

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 93,300
Cost incurred during period	$ 489,090
Total cost to be accounted for	$ 582,390
Costs accounted for as follows:
Cost of Units Transferred Out	$ 567,360
Cost of Ending Wip	$ 15,030
Total cost accounted for	$ 582,390

Working

Reconciliation of Units
A	Beginning WIP	69,000
B	Introduced	340,000
C=A+B	TOTAL	409,000
D	Transferred out	394,000
E=C-D	Ending WIP	15,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	394,000			100%	394,000	100%	394,000
Ending WIP	15,000			80%	12,000	20%	3,000
Total	409,000			Total	406,000	Total	397,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 78,000	$ 15,300	$ 93,300
Cost incurred during period		$ 405,140	$ 83,950	$ 489,090
Total Cost to be accounted for		$ 483,140	$ 99,250	$ 582,390
Total Equivalent Units		406,000	397,000
Cost per Equivalent Units		$                   1.19	$                     0.25	$                1.44

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.19	12,000	$          14,280.00	394,000	$ 468,860
Conversion cost	$ 0.25	3,000	$                750.00	394,000	$ 98,500
TOTAL	$ 582,390	TOTAL	$ 15,030	TOTAL	$ 567,360