Question

Problem 4-16 Comprehensive Problem-Weighted Average Method (L04-2, L04-3, L04-4, L04-5) 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: 82,000 470,000 Production data: Pounds in process, May 1; materials 100% complete; conversion 903 Complete Pounds started into production during May Pounds completed and transerred out Pounds in process, May 31; materials 70% complete; conversion 30% complete Cost data: Work in process inventory, May 11 Materials cost Conversion cost Cost added during May Materials cost Conversion cost 42,000 $152,300 $52 $791,650 $287,390 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

	Beginning work in process	$        82,000	Completed & Transferred			$ 510,000
	pounds started in production	$      470,000	ending work in process			$   42,000
	units to be accounted	$      552,000	units accounted for			$ 552,000
1)	Equivalent units of production
		units	%	materials	%	CC
	Completed & Transferred	510,000	100%	510000	100%	510000
	ending work in process	42,000	80%	33600	20%	8400
	Equivalent units of production			543,600		518,400
2)	Cost per unit
			Materials	CC	Total
	Beginning work in process		$         152,300	$           52,300	$         204,600
	cost added during the year		$         791,650	$         287,390	$      1,079,040
	total cost		$         943,950	$         339,690	$      1,283,640
	equivalent units		$         543,600	$         518,400
	cost per unit		$               1.74	$               0.66	$               2.39
3)	cost of ending work in process inventory
	Materials	33,600	$               1.74	$           58,346
	CC	8,400	$               0.66	$             5,504
	cost of ending WIP			$           63,850
4)	cost of units transferred out
	materials	510,000	$               1.74	$         885,604
	Conversion	510,000	$               0.66	$         334,186
	total			$      1,219,790
5)	cost reconciliation report
	costs to be accounted for:
	Beginning WIP		$         204,600
	cost added during the year		$      1,079,040
	total cost to be accounted		$      1,283,640
	cost accounted for
	Completed & transferred		$           63,850
	ending WIP		$      1,219,790
	cost accounted for		$      1,283,640

Answer 2

		Material	Conversion	Total
1)	Equivalent Units	539,400	522,600
2)	Cost per equivalent unit	1.75	0.65
3)	Cost of Ending WIP	51,450	8,190	59,640
4)	Cost of Transferred Units	892,500	331,500	1,224,000
5)	Cost Reconciliation Report
	Costs to be accounted for:
		Total	Material	Conversion
	Costs in beginning inventory	204,600	152,300	52,300
	Cost added during the year	1,079,040	791,650	287,390
	Total cost to account for	1,283,640	943,950	339,690
		Total	Material	CC
	Cost Accounted for
	Units completed and transfer	1,224,000	892,500	331,500
			(510000*1.75)	(510000*0.65)
	Units in ending inventory	59,640	51,450	8,190
			(29400*1.75)	(12600*0.65)
	Total Cost Accounted   for	1,283,640	943,950	339,690
	Working Note 1:
		Actual Units
	Calculation of Physical UNITS:
	Units in beginning inventory	82,000
	Units started during the period	470,000
	Units to be accounted for	552,000
		Actual Units	Equivalent Units
			Material	Conversion
	Units Completed and Transferred	510,000	510,000	510,000
			(510000*100%)	(510000*100%)
	Units in ending inventory	42,000	29,400	12,600
			(42000*70%)	(42000*30%)
	Total accounted for	552,000	539,400	522,600
	Working Note 2:
	Costs to be accounted for:
		Total	Material	Conversion
	Costs in beginning inventory	204,600	152,300	52,300
	Cost added during the year	1,079,040	791,650	287,390
	Total cost to account for	1,283,640	943,950	339,690
	Equivalent Units from above		539,400	522,600
	Cost per equivalent unit		1.75	0.65