1 answer

Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking...

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:

Production data:
Pounds in process, May 1; materials 100% complete;
conversion 90% complete
60,000
Pounds started into production during May 250,000
Pounds completed and transferred out ?
Pounds in process, May 31; materials 60% complete;
conversion 40% complete
20,000
Cost data:
Work in process inventory, May 1:
Materials cost $ 59,000
Conversion cost $ 23,400
Cost added during May:
Materials cost $ 306,420
Conversion cost $ 128,580

Required:

1. Compute the equivalent units of production for materials and conversion for May.

Materials conversion

equivalent units of production

2. Compute the cost per equivalent unit for materials and conversion for May.

Materials conversion

cost per equivalent unit

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

Materials conversion total

cost of ending work in process inventory

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

Materials conversion total

cost of units transferred out

5. Prepare a cost reconciliation report for May.

Cost Reconciliation

cost to be accounted for   
Answer answr
answr answr
total cost to be accounted for
Costs accounted for as follows:
answr answr
answr answr
Total cost accounted for

Answers

Requirement 1

Material Conversion
Equivalent Units of Production                3,02,000               2,98,000

Requirement 2

Material Conversion
Cost per equivalent Unit $                    1.21 $                   0.51

Requirement 3

Material Conversion Total
Ending Inventory $ 14,520 $ 4,080 $ 18,600

Requirement 4

Material Conversion Total
Units Completed and transferred $ 350,900 $ 147,900 $ 498,800

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost $ 82,400
Cost incurred during period $ 435,000
Total cost to be accounted for $ 517,400
Costs accounted for as follows:
Cost of Units Transferred Out $ 498,800
Cost of Ending Wip $ 18,600
Total cost accounted for $ 517,400

Working

Reconciliation of Units
A Opening WIP                   60,000
B Introduced               2,50,000
C=A+B TOTAL               3,10,000
D Transferred               2,90,000
E=C-D Closing WIP                   20,000

.

Statement of Equivalent Units(Weighted average)
Material Conversion cost
Units Complete % Equivalent units Complete % Equivalent units
Transferred                2,90,000 100%                 2,90,000 100%               2,90,000
Closing WIP                    20,000 60%                    12,000 40%                     8,000
Total                3,10,000 Total                 3,02,000 Total               2,98,000

.

Cost per Equivalent Units (Weighted average)
COST Material Conversion cost TOTAL
Beginning WIP Inventory Cost $ 59,000 $ 23,400 $ 82,400
Cost incurred during period $ 306,420 $ 128,580 $ 435,000
Total Cost to be accounted for $ 365,420 $ 151,980 $ 517,400
Total Equivalent Units               3,02,000                 2,98,000
Cost per Equivalent Units $                   1.21 $                     0.51 $                1.72

.

Statement of cost (Weighted average)
Cost Equivalent Cost/unit Ending WIP Transferred
Units Cost Allocated Units Cost Allocated
Material $ 1.21                   12,000 $          14,520.00            2,90,000 $ 350,900
Conversion cost $ 0.51                     8,000 $             4,080.00            2,90,000 $      1,47,900.00
TOTAL $ 517,400 TOTAL $ 18,600 TOTAL $ 498,800
.

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