Builder Products, Inc., uses the weighted-average method in its process costing
ID: 2334728 • Letter: B
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:
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.
Production data: Pounds in process, May 1; materials 100% complete;conversion 90% complete 84,000 Pounds started into production during May 490,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 60% complete;
conversion 40% complete 44,000 Cost data: Work in process inventory, May 1: Materials cost $ 130,200 Conversion cost $ 21,100 Cost added during May: Materials cost $ 676,580 Conversion cost $ 115,800
Explanation / Answer
Units
Reconciliation of Units
A
Opening WIP
84,000
B
Introduced
490,000
C=A+B
TOTAL
574,000
D
Transferred
530,000
E=C-D
Closing WIP
44,000
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
530,000
100%
530,000
100%
530,000
Closing WIP
44,000
60%
26,400
40%
17,600
Total
574,000
Total
556,400
Total
547,600
Cost per Equivalent Units
COST
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 130,200.00
$ 21,100.00
$ 151,300.00
Cost incurred during period
$ 676,580.00
$ 115,800.00
$ 792,380.00
Total Cost to be accounted for
$ 806,780.00
$ 136,900.00
$ 943,680.00
Total Equivalent Units
556,400
547,600
Cost per Equivalent Units
$ 1.4500
$ 0.2500
Statement of cost
Cost
Equivalent Cost/unit
Ending WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
Material
$ 1.45
26,400
$ 38,280.00
530,000
$ 768,500.00
Conversion Cost
$ 0.25
17,600
$ 4,400.00
530,000
$ 132,500.00
TOTAL
$ 943,680.00
TOTAL
$ 42,680.00
TOTAL
$ 901,000.00
Cost to be accounted for
Beginning Work In Progress:
Cost Transferred
$ -
Material
$ 130,200.00
Conversion Cost
$ 21,100.00
$ 151,300.00
Cost incurred during period:
Cost Transferred
$ -
Material
$ 676,580.00
Conversion Cost
$ 115,800.00
$ 792,380.00
Total Cost to be accounted for
$ 943,680.00
Cost accounted for
Cost of Units transferred
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Cost Transferred
-
$ -
Material
530,000
$ 1.45
$ 768,500.00
Conversion Cost
530,000
$ 0.25
$ 132,500.00
$ 901,000.00
Cost of ending WIP
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Cost Transferred
-
$ -
$ -
Material
26,400
$ 1.45
$ 38,280.00
Conversion Cost
17,600
$ 0.25
$ 4,400.00
$ 42,680.00
Total Cost accounted for
$ 943,680.00
Answers
1. Equivalent units of production for materials = 556400 units
conversion = 547600 units
2. Cost per equivalent unit for materials = $1.45
conversion = $0.25
3. Cost of ending work in process inventory for materials = $38,280. Conversion = $4400.
4. Cost of units transferred out to the next department for materials = $768,500
Conversion = $132,500.
Units
Reconciliation of Units
A
Opening WIP
84,000
B
Introduced
490,000
C=A+B
TOTAL
574,000
D
Transferred
530,000
E=C-D
Closing WIP
44,000
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