Problem 4-16 Comprehensive Problem-Weighted-Average Method [L04-2, LO4-3, LO4-4,

Question

Problem 4-16 Comprehensive Problem-Weighted-Average Method [L04-2, LO4-3, LO4-4, LO4-5) 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 85,000 Pounds started into production during May 500, 000 Pounds completed and transferred out pounds in process, May 31; materials 80% complete; conversion 20% complete 45,000 Cost data: Work in process inventory, May 1: Materials cost Conversion cost $135,700 s 22,000 Cost added during May: Materials cost Conversion cost $705,260 $120, 740 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 Pranare a roet reronciliation renort for Mav

Explanation / Answer

Statement of Equivalent production Particulars Direct Materials %completion Equivalent mat Conversion %completion Equivalent Conv Total Opening WIP                  85,000.00 100%                  85,000.00                  85,000.00 100%                  85,000.00 Units started and completed = 500,000 - 45000                455,000.00 100%                455,000.00                455,000.00 100%                455,000.00 ending WIP                  45,000.00 80%                  36,000.00                  45,000.00 20%                    9,000.00 1) Equivalent Units                576,000.00                549,000.00 Opening WIP Costs                135,700.00                  22,000.00                157,700.00 Current Month Costs                705,260.00                120,740.00                826,000.00 Total costs                840,960.00                142,740.00                983,700.00 2) Cost per Equivalent units                             1.46                             0.26 Ending WIP Units                  36,000.00                    9,000.00 3) Cost of Ending WIP                  52,560.00                    2,340.00                  54,900.00 Units completed and transferred out                540,000.00                540,000.00 4) Cost of Units completed and transferred out                788,400.00                140,400.00                928,800.00

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