Question

Use the following information for the Exercises below. (The following information applies to the questions displayed below.) The Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process costing. At the beginning of the month, the forming department has 36,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $82,100 consisted of $58,000 of direct materials costs and $24,100 of conversion costs. During the month, the forming department started 520,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 85% complete as to materials and 35% complete as to conversion. Units completed in the forming department are transferred to the painting department. Cost information for the forming department is as follows: Beginning work in process inventory Direct materials added during the month Conversion added during the month $ 82,100 1,889,000 1,226,700 Exercise 16-7A FIFO: Costs per EUP LO C4 Assume that Fields uses the FIFO method of process costing. 1. Calculate the equivalent units of production for the forming department. Direct Materials Conversion

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer 2 Part 1) Statement of Equivalent units mt 5 Particulars 6 Beginning inventory units completed and transferred Physical units 36000 Equivalent Units Direct Material Conversion Cost 10800 25200 (36000*30%) (36000*70%) 480000 480000 34000 14000 (40000*85%) (40000*35%) 524800 519200 8 Units started and completed (520000-40000) 9 Ending inventory 480000 40000 10 11 Equivalent Units 556000 524800 519200 13 Thus the final answer 14 Direct Material 15 Conversion 17 Part 2) 18 Calculation of cost per equivalent unit 19 20 Cost incurred during the period 21 Total equivalent units accounted for 22 Cost per equivalent unit Direct Material Conversion Cost 1889000 L 1226700 524800 519200 3.60 2.36 24 Thus the final answer is 25 Direct Material 26 Conversion 3.60 2.36 Per EUP Per EUP