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 81,000
Pounds started into production during May 460,000
Pounds completed and transferred out ?
Pounds in process, May 31; materials 80% complete;
conversion 20% complete 55,000
Cost data:
Work in process inventory, May 1:
Materials cost $ 158,200
Conversion cost $ 50,500
Cost added during May:
Materials cost $ 822,300
Conversion cost $ 277,520
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

Inside the cost report are the figures for EU cost per EU and ending WIP and transferred-out units.

Physical Unit Information

Units charged to production:

Beginning81,000

Started460,000

Total units accounted for by the Department541000

Units to be assigned costs:

           Whole Units  Materials  Conversion

Beginning81,000    81000     81000

Started and

completed405,000405,000405,000

transferred486,000486,000486,000

ending          55000          44,000     11,000

Total units to

be assigned costs541,000530000497000

 Direct MaterialsConversion

Total cost   $980,500.00   $328,020.00

Total equivalent units  530000497000

Cost per equivalent unit   $1.850   $0.660

Explanation:

Ending Inventory equivalent units:

physical units x percentage of completion

ending          55000    44000 (55,000 x 0.8)  11,000 (55,000 x 0.2)

Then, we add up the total completed units to get the equivalent units

The cost per equivalent untis will be adding the cost of beginning to the added during the period.

Then we multiply for the amount missing of beginning inventory

and for the whole equivalent untis of the ending invnetory and transferred out

As we work with wegihted average Equivalent untis will be complete and transferred plus percentage of completion of the ending WIP inventory

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