Question

Problem 4-16 Comprehensive Problem-Weighted Average Method [LO4-2, LO4-3, LO4-4, LO4-5) 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: 90,000 550,000 ? 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 50,000 $152,300 $ 63,300 $791,450 $348,100 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

1) Materials 625,000 Conversion 605,000 Equivalent unit of production 2) 2) Materials Conversion $ 1.51 $ 0.68 Cost per equivalent unit 3) Cost of ending work in process inventory Materials Conversion Total $ 52,850 $ 10,200 $ 63,050 4) Materials Conversion Total $ 890,900 $ 401,200 $ 1,292,100 Cost of units completed and transferred out 5) Cost reconciliation Costs to be accounted for: Cost of beginning Work in process inventory ($152,300 + $63,300) $ 215,600 Cost added to production during the period ($791,450 + $348,100) $1,139,550 Total Cost to be accounted for $ 1,355,150 Cost accounted for as follow: Cost of unit completed and transferred out Cost of ending work in process inventory Total Cost accounted for $1,292,100 $ 63,050 $ 1,355,150 Working Note:

A B с D E F 1 Equivalent Units Of Production (EUP)- Weighted Average Method 2 Units % Materials EUP-Materials % Conversion Eup Conversion 3 Units Completed and transferred Out 590,000 100% 590,000 100% 590,000 4 Ending work in process - units 50,000 70% 35,000 30% 15,000 5 Equivalent units of production 640,000 625,000 605,000 6 7 Cost per EUP Materials Conversion 8 Cost of beginning work in process $ 152,300 $ 63,300 9 Cost incurred this period $ 791,450 $ 348, 100 10 Total costs costs $ 943,750 costs $ 411,400 11 Equivalent units of production EUP 625000 EUP 605000 12 Cost per Equivalent Unit of Production $ 1.51 $ 0.68 13 Cost Assignment and Reconciliation 14 Costs transferred out EUP Cost per EUP Total cost 15 Direct materials 590,000 $ 1.51 $ 890,900 16 Conversion 590,000 $ 0.68 $ 401,200 17 Total transferred out $ 1,292,100 18 Costs of ending work in process EUP Cost per EUP Total cost 19 Direct materials 35,000 $ 1.51 $ 52,850 20 Conversion 15,000 $ 0.68 $ 10,200 21 Total ending work in process $ 63,050 22 Total costs accounted for $ 1,355,150 $

A B с D E F 1 Equivalent Units Of Production (EUP)- Weighted Average Method 2 Units % Materials EUP-Materials % Conversion Eup Conversion 3 Units Completed and transferred Out =90000+550000-50000 1 =+B3*C3 1 =+B3*E3 4 Ending work in process - units 50000 0.7 =+B4*C4 0.3 =+B4%E4 5 Equivalent units of production =+B3+B4 =+D3+D4 =+F3+F4 6 7 Cost per EUP Materials Conversion 8 Cost of beginning work in process 152300 63300 9 Cost incurred this period 791450 348100 10 Total costs costs =+D8+D9 costs =+F8+F9 11 Equivalent units of production EUP =+D5 EUP =+F5 12 Cost per Equivalent Unit of Production =+D10/D11 =+F10/F11 13 Cost Assignment and Reconciliation 14 Costs transferred out EUP Cost per EUP Total cost 15 Direct materials =+D3 =+D12 =+B15*C15 16 Conversion =+F3 =+F12 =+B16*C16 17 Total transferred out =+D15+D16 18 Costs of ending work in process EUP Cost per EUP Total cost 19 Direct materials =+D4 =+D12 =+B19*C19 20 Conversion =+F4 =+F12 =+B20*C20 21 Total ending work in process =+D19+D20 22 Total costs accounted for =+E17+E21