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: Connect Production data: Pounds in process, May 1; materials 100% complete ; 73,000 380,000 conversion 90% complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31; materials 80% complete; conversion 20% complete 33,000 Cost data: Work in process inventory, May 1: Materials cost Conversion cost $111,600 $55,800 Cost added during May: Materials cost Conversion cost $580,320 $306,810 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

1 Physical units Materials Conversion Transferred to next department 420000 420000 420000 Work in process, ending 33000 26400 6600 Equivalent units 453000 446400 426600 2 Materials Conversion Total costs 691920 362610 Equivalent units 446400 426600 Costs per equivalent unit 1.55 0.85 3 Cost of ending work in process inventory: Materials 40920 =26400*1.55 Conversion 5610 =6600*0.85 Total 46530 4 Cost of units completed and transferred out Materials 651000 =420000*1.55 Conversion 357000 =420000*0.85 Total 1008000 5 Costs to be accounted for: Work in process, beginning May 1 167400 Cost added during the month. 887130 Total Costs to be accounted for 1054530 Cost accounted for as follows: Transferred out 1008000 Work in process, ending May 31 46530 Total Cost accounted for 1054530

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