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: Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 87,000 Pounds started into production during May 520,000 Pounds completed and transferred out Pounds in process, May 31; materials 75% complete; conversion 25% complete 47,000 Cost data: Work in process inventory, May 1: Materials cost $142,100 Conversion cost $ 63,300 Cost added during May: Materials cost $738,870 Conversion cost $348, 360 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the equivalent units of production for materials and conversion for May. Materials Conversion Equivalent units of production < Required 1 Required 2 >

Answer 1

Requirement 1

	Material	Conversion
Equivalent Units of Production	5,95,250	5,71,750

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$                    1.48	$              0.72

Requirement 3 and 4

	Material	Conversion	Total
Ending Inventory	$ 52,170	$ 8,460	$ 60,630
Units Completed and transferred	$ 828,800	$ 403,200	$ 1,232,000

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 205,400
Cost incurred during period	$ 1,087,230
Total cost to be accounted for	$ 1,292,630
Costs accounted for as follows:
Cost of Units Transferred Out	$ 1,232,000
Cost of Ending Wip	$ 60,630
Total cost accounted for	$ 1,292,630

Working

Reconciliation of Units
A	Opening WIP	87,000
B	Introduced	5,20,000
C=A+B	TOTAL	6,07,000
D	Transferred	5,60,000
E=C-D	Closing WIP	47,000

Statement of Equivalent Units
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	5,60,000			100%	5,60,000.0	100%	5,60,000
Closing WIP	47,000			75%	35,250.0	25%	11,750
Total	6,07,000			Total	5,95,250.0	Total	5,71,750

Cost per Equivalent Units
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 142,100	$ 63,300	$ 205,400
Cost incurred during period		$ 738,870	$ 348,360	$ 1,087,230
Total Cost to be accounted for		$ 880,970	$ 411,660	$ 1,292,630
Total Equivalent Units		5,95,250	5,71,750
Cost per Equivalent Units		$              1.48	$             0.72

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.48	35,250	$ 52,170	5,60,000	$ 828,800
Conversion cost	$ 0.72	11,750	$ 8,460	5,60,000	$ 403,200
TOTAL	$ 1,292,630	TOTAL	$ 60,630	TOTAL	$ 1,232,000