Q5 Builder Products, Inc., uses the weighted-average method in its process costi
ID: 2342530 • Letter: Q
Question
Q5
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 Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 80% complete ; 81,000 460,000 conversion 20% complete 55,000 Cost data: Work in process inventory, May 1: Materials cost Conversion cost $158,200 $ 50,500 Cost added during May: Materials cost Conversion cost $822,300 $277,520 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
Units
Reconciliation of Units
A
Opening WIP
81,000
B
Introduced
460,000
C=A+B
TOTAL
541,000
D
Transferred
486,000
E=C-D
Closing WIP
55,000
Requirement 1
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
486,000
100%
486,000
100%
486,000
Closing WIP
55,000
80%
44,000
20%
11,000
Total
541,000
Total
530,000
Total
497,000
Equivalent units
Material = 530,000 units
Conversion= 497,000 units
Requirement 2
Cost per Equivalent Units
COST
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 158,200.00
$ 50,500.00
$ 208,700.00
Cost incurred during period
$ 822,300.00
$ 277,520.00
$ 1,099,820.00
Total Cost to be accounted for
$ 980,500.00
$ 328,020.00
$ 1,308,520.00
Total Equivalent Units
530,000
497,000
Cost per Equivalent Units
$ 1.85
$ 0.66
Cost per Equivalent units
Material = $1.85 per Unit
Conversion= $0.66 per unit
Requirement 3
Statement of cost
Cost
Equivalent Cost/unit
Ending WIP
Units
Cost Allocated
Material
$ 1.85
44,000
$ 81,400.00
Conversion Cost
$ 0.66
11,000
$ 7,260.00
TOTAL
$ 1,308,520.00
TOTAL
$ 88,660.00
Cost of Ending Inventory
Material= $81400.00
Conversion= $7260
Total for may = $88660.00
Requirement 4
Statement of cost
Cost
Equivalent Cost/unit
Transferred
Units
Cost Allocated
Cost Transferred
$ -
-
$ -
Material
$ 1.85
486,000
$ 899,100.00
Conversion Cost
$ 0.66
486,000
$ 320,760.00
TOTAL
$ 1,308,520.00
TOTAL
$ 1,219,860.00
Cost of Units transferred out
Material= $899100.00
Conversion= $320760.00
Total for may = $1219860.00
Requirement 5
Reconciliation
Cost to be accounted for
Beginning Work In Progress:
Material
$ 158,200.00
Conversion Cost
$ 50,500.00
$ 208,700.00
Cost incurred during period:
Material
$ 822,300.00
Conversion Cost
$ 277,520.00
$ 1,099,820.00
Total Cost to be accounted for
$ 1,308,520.00
Cost accounted for
Cost of Units transferred
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
486,000
$ 1.85
$ 899,100.00
Conversion Cost
486,000
$ 0.66
$ 320,760.00
$ 1,219,860.00
Cost of ending WIP
Equivalent Units
Cost per Equivalent Units
Cost accounted for
Material
44,000
$ 1.85
$ 81,400.00
Conversion Cost
11,000
$ 0.66
$ 7,260.00
$ 88,660.00
Total Cost accounted for
$ 1,308,520.00
Units
Reconciliation of Units
A
Opening WIP
81,000
B
Introduced
460,000
C=A+B
TOTAL
541,000
D
Transferred
486,000
E=C-D
Closing WIP
55,000
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