Builder Products, Inc., manufactures a caulking compound that goes through 3 processing stages...


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 100% complete; conversion 80% complete 10,000. Pounds started into production during May 100,000. Pounds completed and transferred out is unknown. 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

The company uses the weighted-average method.


1. Compute the equivalent units of production.

2. Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)

3. Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Do not round your intermediate calculations.)

4. Prepare a cost reconciliation report for the month. (Do not round your intermediate calculations.)

Process costing

Process costing is a system of cost accounting used by the industries producing homogeneous products as mass produce. It uses cost per equivalent unit and equivalent units in production as the basis for cost apportionment to the inventories.

Answer and Explanation: 1

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Calculate the equivalent units as follows:

Statement showing calculation of no. of units completed and transferred out  

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Process Costing: Definition & Examples


Chapter 1 / Lesson 12

Learn about process costing. Study the process costing definition, examine process costing examples, and discover why process costing systems are so important.

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