Question

Builder Products, Inc. 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:
Units in process, May 1: 100% complete as to materials and 80% complete as to labour and overhead		16,700
Units started into production during May		127,000
Units completed and transferred out		117,000
Units in process, May 31: 60% complete as to materials and 20% complete as to labour and overhead		?
Cost data:
Work-in-process inventory, May 1:
Materials cost	$	2,850
Labour cost		3,760
Overhead cost		7,700
Cost added during May:
Materials cost		194,000
Labour cost		37,600
Overhead cost		90,400

Materials are added at several stages during the cooking process, whereas labour and overhead costs are incurred uniformly. The company uses the weighted average cost method. The company combines labour and overhead into a single cost category—conversion cost.

Required:

Prepare a production report for the cooking department for May. Use the following three steps in preparing your report:

1. Prepare a quantity schedule and a computation of equivalent units.

	Quantity Schedule
Units to be accounted for:
Work in process, May 1
Units brought into production and fully completed during the month
Total units	0

		Equivalent Units (EU)
	Units	Materials	Labour	Overhead
Units accounted for as follows:
Transferred out
Units brought into production and fully completed during the month
Total units and equivalent units of production	0	0	0	0

  

2. Compute the costs per equivalent unit for the month. (Round your answers to 3 decimal places.)

	Materials	Labour	Overhead
Costs per equivalent unit

3. Using the data from parts (1) and (2), prepare a cost reconciliation. (Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

Note: There is difference of "$28" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for"".

		Equivalent Units (EU)
	Total Cost	Materials	Labour	Overhead
Cost accounted for as follows:
Work in process, May 31:
Total work in process	0
Total cost	$0

4. Prepare a production report for the cooking department for May. Assuming the company uses the FIFO method. Follow parts (1) to (3). (Leave no cells blank, enter "0" wherever required. Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

  
Quantity Schedule and Equivalent Units

	Quantity Schedule
Units to be accounted for:
Total units	0

		Equivalent Units (EU)
	Units	Materials	Labour	Overhead
Units accounted for as follows:
Total units and equivalent units of production	0	0	0	0

Cost per Equivalent Unit

	Materials	Labour	Overhead
Costs per equivalent unit

Cost Reconciliation

Note: There is difference of "$28" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for"".

		Equivalent Units (EU)
	Total Cost	Materials	Labour	Overhead
Cost accounted for as follows:
Prior period cost in Work in Process, May 1	$14,310
Cost incurred during May:
To complete units in Work in Process, May 1
Total	0
To partially complete units in Work in Process, May 31
Total	0
Total cost	$14,310
Cost transferred out, May 31	$14,310

Answer 1

SOLUTION:

Reconciliation of Units
A	Beginning WIP	16700
B	Started into production	127000
C=A+B	TOTAL	143700
D	Completed & Transferred out	117000
E=C-D	Ending WIP	26700

.

Statement of Equivalent Units(Weighted average)
			Material	Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	117000			100%	117000	100%	117000
Ending WIP	26700			60%	16020	20%	5340
Total	143700			Total	133020	Total	122340

.

Cost per Equivalent Units (Weighted average)
COST	Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost	$ 2850	$ 11460	$ 14310
Cost incurred during period	$ 194000	$ 128000	$ 322000
Total Cost to be accounted for	$ 196850	$ 139460	$ 336310
Total Equivalent Units	133020	122340
Cost per Equivalent Units	$ 1.48	$ 1.14	$ 2.62

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP	Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.48	16020	$ 23700	117000	$ 173160
Conversion cost	$ 1.14	5340	$ 6070	117000	$ 133380
TOTAL	$ 336310	TOTAL	$ 29770	TOTAL	$ 306540

Cost Reconciliation:

Costs to be accounted for:
Beginning WIP Cost	14310
Cost incurred during period	322000
Total cost to be accounted for	336310
Cost accounted for as follows
Cost of units transferred out	306540
Cost of ending WIP	29770
Total cost accounted for	336610