Builder Products, Inc., manufactures a caulking compound that goes through three
ID: 2422613 • Letter: B
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:
Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)
Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Round your intermediate calculation to 2 decimal places.)
Prepare a cost reconciliation report for the month. (Round your intermediate calculations to 2 decimal places.)
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:
Explanation / Answer
1.COMPUTATION OF EQUIVALENT UNITS OF PRODUCTION:
OPENING POUNDS =84,000
ADD:POUNDS INTRODUCED DURING MONTH =4,90,000
LESS:CLOSING POUNDS =44,000
POUNDS COMPLETED AND TRANSFERRED OUT =5,30,000
2.COMPUTATION OF COST PER EQUIVALENT UNITS FOR THE MONTH
TOTAL COST FOR THE MONTH:
OPENING WORK IN PROCESS:
MATERIAL COST =$1,30,200
CONVERSION COST =$21,100
ADD:COST ADDED DURING MAY
MATERIAL COST =$6,76,580
CONVERSION COST =$1,15,800
$9,43,680
COST PER EQUIVALENT UNITS FOR THE MONTH= $9,43,680/5,30,000=$1.78
3.COST OF ENDING WORK IN PROCESS=44,000*$1.78=$78,320
COST OF UNITS TRANSFERRED OUT TO NEXT DEPARTMENT=5,30,000*$1.78=$9,43,400
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