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 80% complete 10,000 Pounds started into production during May 100,000 Pounds completed and transferred out ? Pounds in process, May 31; materials 60% complete; conversion 20% complete 15,000 Cost data: Work in process inventory, May 1: Materials cost $ 1,500 Conversion cost $ 7,200 Cost added during May: Materials cost $ 154,500 Conversion cost $ 90,800 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:

Opening units  10000

Started              100000

                         110000

Closing                 -15000

Transferred          95000

                                                Cost Table W.Avg Method      

             A    B          C=A+B      D       E  F=D+E     G=C/F  

Cost      Opening    cost          Total      complete  Closing  Equival         Cost

Head       cost        incurred    Cost           units        WIP      ant units       P/U

Material   1,500     154,500    156,000    95,000    9,000   104,000         1.50  

CC           7,200    90,800     98,000     95,000    3,000   98,000          1.00  

                                                                                          2.50  

1) equivalent units of production for materials and conversion cost

Material                                   104,000

conversion cost                       98,000  

2)cost per equivalent unit for materials and conversion

Material                                   1.5

conversion cost                      1.0

3)cost of ending work in process inventory for materials, conversion, and in total

Material                        15000*0.6           9,000

conversion cost           15000*0.2           3,000  

                                                                 12000

D)cost of units transferred out to the next department for materials, conversion, and in total

Complete               95,000  

Material                        95000*1.5           142500

conversion cost           95000*1.0           95000

                                                                 237500

Or

Complete  95,000   2.50   237,500  

5) Reconciliation

Openiing Wip    

Material    10,000             1,500  

Labour          8,000             7,200  

                                    8,700  

Complete  95,000   2.50   237,500  

Closing Wip    

Material    9,000   1.50   13,500  

Labour           3,000   1.00   3,000  

                                   16,500  

Total Cost                          262,700  

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