Question

Builder products in uses the weighted average method in its process costing systems it manufactures a caulking compound that goes through three proccessing stages prior to completion. information on work in the first department cooking is given below for the may:

Production data;

pounds in process may 1 materials 100% complete; conversion 80% complete 10,000

pounds started into production during may 100,000

pounds completed and transfer out ?

Pounds in process may 31,; materials 60% complete; conversion 20% complete 15,000

cost data

work in process inventory May 1:

Material cost $ 1,500

conversion cost $ 7,200

cost added during may

materials cost $ 154,500

Conversion cost $ 90,800

1.compute the equilvalnt 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 transferd out to the next department for materials, conversion and in total for MAY

5. Prepare a cost reconciliation report for MAY

Answer 1

Solution 1:

Computation of Equivalent unit of Production - Weighted Average - First Department
Particulars	Physical Units	Material	Conversion
Units accounted for:
Unit completed & Transferred out	95000	95000	95000
Ending WIP:	15000
Material (60%)		9000
Conversion (20%)			3000
Equivalent units of production	110000	104000	98000

Solution 2:

Computation of Cost per equivalent unit of Production - Weighted Average - First Department
Particulars	Material	Conversion
Opening WIP	$1,500.00	$7,200.00
Cost Added during May	$154,500.00	$90,800.00
Total cost to be accounted for	$156,000.00	$98,000.00
Equivalent units of production	104000	98000
Cost per Equivalent unit	$1.50	$1.00

Solution 3 & 4:

Computation of Cost of ending WIP and units completed & transferred out - First Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	9000	3000
Cost per equivalent unit	$1.50	$1.00
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$13,500	$3,000	$16,500
Units completed and transferred	95000	95000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$142,500	$95,000	$237,500

Solution 5:

Cost reconciliation - First Department
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory	$8,700.00
Cost added to production	$245,300.00
Total Cost to be accounted for	$254,000.00
Costs accounted for as follows:
Cost of unit transferred out	$237,500
Ending WIP:
Material	$13,500
Converison	$3,000
Total Ending WIP	$16,500
Total cost accounted for	$254,000