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: 74,000 390,000 ? 34,000 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 70% complete; conversion 30% complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost $ 98,800 $ 44,000 $513, 830 $242,130 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

Conversion Units completed & transferred out Work in process inventory, May 31 1 Equivalent units of production Physical Units 430,000 34,000 464,000 Equivalent Units Materials 430,000 23,800 453,800 100% 70% 100% 30% 430,000 10,200 440,200 Material Conversion Costs per equivalent unit of production Work in process inventory, May 1 Cost added during May Total costs Divided by Equivalents units of production 2 Costs per equivalent unit of production $98,800 $513,830 $612,630 453,800 $1.35 $44,000 $242,130 $286,130 440,200 S0.65 4 Costs of units transfrred out: Direct materials Conversion Total costs transferred out 3 Costs of ending work in process Direct materials Conversion Work in process, Ending Total costs accounted for EUP Cots per EUP Total cost 430,000 $1.35 $580,500 430,000 $0.65 $279,500 S860,000 EUP Cots per EUP Total cost 23,800 $1.35 $32,130 10,200 $0.65 S6,630 $38,760 $898.760 5 5 Cost Reconciliation Cost to be accounted for: Work in process inventory, May 1 Cost added during period Total cost to be accounted for Costs accounted for as follows: Completed and transferred out Work in process inventory, May 31 Total cost accounted for $142,800 $755,960 $898,760 $860,000 $38,760 $898,760