Questions: Problem 4-16 (Static) Comprehensive Problem-Weighted-Average Method [LO4-2, LO4-3, LO4-4, LO4-5] Builder Products, Incorporated, uses the weighted-average method of process costing. 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 Conversion cost 154,500 90,800 Required: For May: 1. Compute the equivalent units of production for materials and conversion. 2. Compute the cost per equivalent unit for materials and conversion. 3. Compute the cost of ending work in process inventory for materials, conversion, and in total. 4. Compute the cost of units transferred out to the next department for materials, conversion, and in total. 5. Prepare a cost reconciliation report. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. Note: Round your intermediate calculations to 2 decimal places.

Problem 4-16 (Static) Comprehensive Problem-Weighted-Average Method [LO4-2, LO4-3, LO4-4, LO4-5] Builder Products, Incorporated, uses the weighted-average method of process costing. 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 Conversion cost 154,500 90,800 Required: For May: 1. Compute the equivalent units of production for materials and conversion. 2. Compute the cost per equivalent unit for materials and conversion. 3. Compute the cost of ending work in process inventory for materials, conversion, and in total. 4. Compute the cost of units transferred out to the next department for materials, conversion, and in total. 5. Prepare a cost reconciliation report. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. Note: Round your intermediate calculations to 2 decimal places.
Transcript text: Problem 4-16 (Static) Comprehensive Problem-Weighted-Average Method [LO4-2, LO4-3, LO4-4, LO4-5] Builder Products, Incorporated, uses the weighted-average method of process costing. 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 Conversion cost $ 154,500 $90,800 Required: For May: 1. Compute the equivalent units of production for materials and conversion. 2. Compute the cost per equivalent unit for materials and conversion. 3. Compute the cost of ending work in process inventory for materials, conversion, and in total. 4. Compute the cost of units transferred out to the next department for materials, conversion, and in total. 5. Prepare a cost reconciliation report. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May. Note: Round your intermediate calculations to 2 decimal places.
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Solution

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Solution Steps

Step 1: Calculate Equivalent Units of Production
  • Materials: 10,000 (beginning WIP) + 100,000 (started) = 110,000 (total units)
  • Conversion: (10,000 * 0.20 (work needed)) + 100,000 = 102,000 equivalent units
Step 2: Calculate Cost per Equivalent Unit
  • Materials: ($1,500 (beginning WIP cost) + $154,500 (added cost)) / 110,000 (equivalent units) = $1.42 per equivalent unit
  • Conversion: ($7,200 + $90,800) / 102,000 = $0.96 per equivalent unit
Step 3: Calculate the Cost of Units Transferred Out
  • Materials: 100,000 units * $1.42 cost per unit = $142,000
  • Conversion: 100,000 units * $0.96 cost per unit = $96,000
  • Total: $142,000 (materials) + $96,000 (conversion) = $238,000

Final Answer:

  • Materials: $142,000
  • Conversion: $96,000
  • Total: $238,000
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