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:
|Pounds in process, May 1; materials 100% complete;
conversion 90% complete
|Pounds started into production during May||530,000|
|Pounds completed and transferred out||?|
|Pounds in process, May 31; materials 60% complete;
conversion 40% complete
|Work in process inventory, May 1:|
|Cost added during May:|
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
|Unit transferred out||553000||553000|
|Ending WIP||65000*60% = 39000||26000|
|Equivalent unit of production||592000||579000|
2) Cost per equivalent unit
|Cost per equivalent unit||1.11||0.67|
3) Cost of ending WIP
|Cost of ending WIP||39000*1.11 = 43290||26000*.67 = 17420||60710|
4) Cost of unit transferred out
|Cost of unit transferred out||553000*1.11 = 613830||370510||984340|
5) Cost reconciliation
|Cost to be accounted for|
|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|
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