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: 10,000 100,000 ? 15,000 Production data: Pounds in process, May 1; materials 100% complete; conversion 80% complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 60% complete; conversion 20% complete Cost data: Work in process inventory, May 1: Materials cost Conversion cost Cost added during May: Materials cost Conversion cost $ $ 1,500 7,200 $154,500 $ 90,800 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 104,000 Conversion 98,000 Equivalent unit of production 2) 2) Materials Conversion $ 1.50 $ 1.00 Cost per equivalent unit 3) Materials Conversion Total $ 13,500 $ 3,000 $ 16,500 Cost of ending work in process inventory 4) Materials Conversion Total $ 142,500 $ 95,000 $ 237,500 Cost of units completed and transferred out Working Note: 5) Cost reconciliation Costs to be accounted for: Cost of beginning Work in process inventory ($1,500 + $7,200) Cost added to production during the period ($154,500 + $90,800) Total Cost to be accounted for $ 8,700 $ 245,300 $ 254,000 Cost accounted for as follow: Cost of unit completed and transferred out Cost of ending work in process inventory Total Cost accounted for $ 237,500 $ 16,500 $ 254,000

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 95,000 100% 95,000 100% 95,000 4 Ending work in process - units 15,000 60% 9,000 20% 3,000 5 Equivalent units of production 110,000 104,000 98,000 6 7 Cost per EUP Materials Conversion 8 Cost of beginning work in process $ 1,500 $ 7,200 9 Cost incurred this period $ 154,500 $ 90,800 10 Total costs costs $ 156,000 costs $ 98,000 11 Equivalent units of production EUP 104000 EUP 98000 12 Cost per Equivalent Unit of Production $ 1.50 $ 1.00 13 Cost Assignment and Reconciliation 14 Costs transferred out EUP Cost per EUP Total cost 15 Direct materials 95,000 $ 1.50 $ 142,500 16 Conversion 95,000 $ 1.00 $ 95,000 Total transferred out $ 237,500 18 Costs of ending work in process EUP Cost per EUP Total cost 19 Direct materials 9,000 $ 1.50$ 13,500 20 Conversion 3,000 $ 1.00 $ 3,000 21 Total ending work in process $ 16,500 22 Total costs accounted for $ 254,000 17

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 =10000+100000-15000 1 =+B3*C3 1 =+B3*E3 4 Ending work in process - units 15000 0.6 =+B4*C4 0.2 =+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 1500 7200 9 Cost incurred this period 154500 90800 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