Builder Products, Inc., uses the weighted-average method in its process costing

Question

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 ; 90,000 550,000 conversion 90% complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 70% complete ; conversion 30% complete 50,000 Cost data: Work in process inventory, May 1 Materials cost Conversion cost Cost added during May Materials cost Conversion cost $152,300 63,300 791,450 $348,100 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

Explanation / Answer

Material Conversion Total Cost of units completed and transferred out $    8,90,900 $       4,01,200 $ 12,92,100 Working: # 1:Calculation of physical units completed and transferred: Beginning units in process               90,000 Units started into production           5,50,000 Total           6,40,000 Less:Ending units               50,000 Units finished and completed           5,90,000 # 2:Calculation of equivalent units of production Material Conversion Physical units % of completion Equivalent units % of completion Equivalent units Units completed        5,90,000 100%         5,90,000 100%        5,90,000 Ending units in process            50,000 70%             35,000 30%           15,000 Total        6,40,000         6,25,000        6,05,000 # 3:Calculation of cost per equivalent units Material Conversion Beginning cost $       1,52,300 $        63,300 Costs incurred $       7,91,450 $     3,48,100 Total costs $       9,43,750 $     4,11,400 /Equivalent units of production           6,25,000         6,05,000 Cost per equivalent unit $               1.51 $             0.68 # 4:Calculation of cost of units transferred and ending units Equivalent units of production Cost per Total Total costs Equivalent units of production Units transfrred out: Materials           5,90,000 $            1.51 $       8,90,900 Conversion           5,90,000 $            0.68 $       4,01,200 $ 12,92,100 Units in ending work in process: Materials               35,000 $            1.51 $           52,850 Conversion               15,000 $            0.68 $           10,200 $       63,050

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