Question

1. Bobby Builders manufactures caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking is given below for the month of November:

Production data:

Pounds of process, Nov 1; Materials 100% complete;

Conversion 80% complete 10,000

Pounds started into production during November 100,000

Pounds completed and transferred out ?

Pounds in process; Nov 30; Materials 60% complete;

Conversion 20% complete 15,000

Cost data:

Work in process inventory, Nov 1:

Materials Cost $1,500

Conversion Cost $7,200

Cost added during November:

Materials Cost $154,500

Conversion Cost $90,800

The company uses the weighted-average method.

1. Compute the equivalent units of production.

2. Compute the cost per equivalent unit for the month.

3. Determine the cost of ending work in process inventory and of the units transferred out to the next department.

4. Prepare a cost reconciliation report for the month.

Answer 1

Work in Process, Beginning	10000
Add: Pounds started during November	100000
Less: Ending inventory	(15000)
Units completed and transferred out	95000
1
	Materials	Conversion
Units completed and transferred out	95000	95000
Work in process, ending:
15000 X 60%	9000
15000 X 20%		3000
Equivalent units of production	104000	98000
2
	Materials	Conversion
Work in process, November 1	1500	7200
Cost added during November	154500	90800
Total costs	156000	98000
Divide by Equivalent units of production	104000	98000
Cost per Equivalent unit	1.50	1.00
3
	Materials	Conversion	Total
Work in process, ending units	9000	3000
X Cost per Equivalent unit	1.50	1.00
Cost of ending work in process inventory	13500	3000	16500
	Materials	Conversion	Total
Units completed and transferred out	95000	95000
X Cost per Equivalent unit	1.50	1.00
Cost of Units completed and transferred out	142500	95000	237500
Cost of ending work in process inventory	16500
Cost of Units completed and transferred out	237500
4
Cost Reconciliation:
Cost to be accounted for:
Cost of Beginning work in Process inventory	8700
Cost added during November	245300
Total Cost to be accounted for	254000
Cost accounted for as follows:
Cost of Units completed and transferred out	237500
Cost of ending work in process inventory	16500
Total Cost accounted for	254000