Question

# Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking...

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:

 Production data: Pounds in process, May 1; materials 100% complete; conversion 90% complete 88,000 Pounds started into production during May 530,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 60% complete; conversion 40% complete 65,000 Cost data: Work in process inventory, May 1: Materials cost \$ 106,000 Conversion cost \$ 59,700 Cost added during May: Materials cost \$ 551,120 Conversion cost \$ 328,230

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.

1) Equivalent unit

 Material Conversion Unit transferred out 553000 553000 Ending WIP 65000*60% = 39000 26000 Equivalent unit of production 592000 579000

2) Cost per equivalent unit

 Material Conversion Beginning WIP 106000 59700 Cost added 551120 328230 Total Cost 657120 387930 Equivalent unit 592000 579000 Cost per equivalent unit 1.11 0.67

3) Cost of ending WIP

 Material Conversion Total Cost of ending WIP 39000*1.11 = 43290 26000*.67 = 17420 60710

4) Cost of unit transferred out

 Material Conversion Total Cost of unit transferred out 553000*1.11 = 613830 370510 984340

5) Cost reconciliation

 Cost to be accounted for Beginning WIP 165700 Cost added 879350 Total cost to be accounted for 1045050 Cost accounted for Cost of unit transferred out 984340 Cost of ending WIP 60710 Total Cost accounted for 1045050