Problem 4-16 Comprehensive Problem-Weighted-Average Method [L04-2, LO4-3 Builder

Question

Problem 4-16 Comprehensive Problem-Weighted-Average Method [L04-2, LO4-3 Builder Products, Inc., 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 86,000 510,000 100% complete, conversion 90% complete Pounds started into production during May Pounds completed and transferred out Pounds in process, May 31 materials 70% complete, conversion 30% complete 55,000 Cost data: Work in process inventory, May 1 Materials cost Conversion cost $ 98,200 $ 62,600 Cost added during May Materials cost Conversion cost s 510,275 s 344,375 The company uses the weighted-average method Required: 1. Compute the equivalent units of production. Materials Conversion Equivalent units of production 2. Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places.) Materials Conversion Cost per equivalent unit 3. Determine the cost of ending work in process inventory and of the units transferred out to the next department (Round your intermediate calculation to 2 decimal places.) Total Cost of ending work in process inventory Cost of units completed and transferred out

Explanation / Answer

Solution:

Computation of Equivalent unit of Production - Weighted Average (Cooking Department) Particulars Physical Units Material Conversion Unit completed & Transferred out (86000 + 510000 - 55000) 541000 541000 541000 Closing WIP: 55000 Material (70%) 38500 Conversion (30%) 16500 Equivalent units of production 596000 579500 557500

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