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 67,000 Pounds started into production during May 320,000 Pounds completed and transferred out ?Pounds in process, May 31: materials 70% complete: conversion 30% complete 34,000 Cost data: Work in process inventory, May 1: Materials cost exist 98, 800 Conversion cost exist 44,000 Cost added during May: Materials cost exist513, 830 Conversion cost exist242, 130 Compute the equivalent units of production for materials and conversion for May 2.

Solution:

Weighted-Average Method:  

1. Equivalent units of production  

                                                                  Materials          Conversion

Transferred to next department'               353,000              353,000

Equivalent units in ending work in process

Materials: 27,000 units x 100% complete     27,000

Conversion: 27,000 units x 90% complete                             4,300

Equivalent units of production                      380,000          357,300  

*Units transferred to the next department = Units in beginning work in process + Units started into production - Units in ending work in process = 67,000 + 320,000 - 34,000 = 353,000

2. Cost per equivalent unit  

                                                                Materials          Conversion

Cost of beginning work in process       $ 98, 800           $ 44,000

Cost added during the period               513, 830               242, 130

Total cost (a)                                          $612,630            $ 286,130

Equivalent units of production (b)          380,000            357,300

Cost per equivalent unit (a) ÷ (b)               $1.61                 $ 0.80

3. and 4.

Cost of ending work in process inventory and units transferred out  

                                                        Materials       Conversion     Total

Ending work in process inventory:

Equivalent units                                 27,000             4,300

Cost per equivalent unit                     $ 1.61              $ 0.80

Cost of ending

work in process inventory             $ 43,470          $ 3,440     $ 45,910

Units completed and transferred out:

Units transferred to the                    353,000       353,000

next department  

Cost per equivalent unit                      $ 1.61            $ 0.80

Cost of units completed and

transferred out                                $ 568,330    $ 282,400     $850,730  

5. Cost Reconciliation:  

Cost of beginning work in process inventory ($ 98, 800+ $44,000 ) = $142,800

Costs added to production during the period ($ 513, 830+ $242, 130 ) = $755,960

the answer is a. $209,000