Question

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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 27,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $56,100 consisted of $40,000 of direct materials costs and $16,100 of conversion costs.

During the month, the forming department started 320,000 units. At the end of the month, the forming department had 35,000 units in ending inventory, 80% complete as to materials and 40% 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	$	62,100
Direct materials added during the month		1,660,000
Conversion added during the month		929,300

1.
Calculate the equivalent units of production for the forming department.


2.
Calculate the costs per equivalent unit of production for the forming department.

3.
Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.

Answer 1

1) The equivalent units of production for the forming department: Direct Materials 340,000 Units Conversion 326,000 Units 2) The costs per equivalent unit of production for the forming department: Direct Materials $5.00 EUP Conversion $2.90 EUP EUP 312.000 312.000 Cost per EUP $5.00 $2.90 Total cost $1,560,000 $904.800 $2.464.800 Cost Assignment and Reconciliation Cost of units transferred out Direct materials Conversion Total costs transferred out Cost of ending work in process Direct materials Conversion Total Cost of ending work in process Total Costs accounted for EUP 28.000 14.000 Cost per EUP $5.00 $2.90 Total cost $140,000 $40,600 $180.600 $2,645.400 Workings: Units reconciliation units to accounts for Beginning Work in process Units started this period Total units to account for Total units accounted for Completed and transferred out Ending Work in process Total units accounted for 27.000 320,000 347.000 312.000 35.000 347.000 Equivalent units of production (EUP) - Weighted Average Method Units % Materials EUP-Materials % Conversion EUP-Conversion Units completed and transferred out 312.000 100% 312.000 100% 312.000 Units of ending work in process 35,000 80% 28.000 40% 14.000 Total units 347.000 340,000 326,000 Cost per equivalent unit of production Cost of beginning work in process Costs incurred this period Total costs / Equivalent units of production Cost per equivalent unit of production Materials $40.000 $1,660,000 $1,700.000 costs 340.000 EUP $5.00 Conversion $16.100 $929,300 $945,400 326,000 $2.90 costs EUP Note: Beginning work in process inventory consider the amount $56,100 instead of (In the cost information Beginning work in process inventory given in the question amount $62,100)