The Fields Company has two manufacturing departments, forming and painting. The

Question

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 33,500 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $77,100 consisted of $55,000 of direct materials costs and $22,100 of conversion costs.

During the month, the forming department started 470,000 units. At the end of the month, the forming department had 35,000 units in ending inventory, 90% complete as to materials and 50% 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:

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

Beginning work in process inventory $ 77,100 Direct materials added during the month 1,745,000 Conversion added during the month 1,154,020

Explanation / Answer

Units transferred out = 33500+470000-35000 = 468500 Unit

Equivalent unit of material = 468500+(35000*90%) = 500000 Units

Equivalent unit of conversion = 468500+(35000*50%) = 486000 Unit

2) Cost per equivalent unit of material = (55000+1745000)/500000 = 3.60 per equivalent unit

Cost per equivalent unit of conversion = (22100+1154020)/486000 = 2.42 per equivalent unit

Cost assignment and reconciliation Cost of units transferred out EUP Cost per EUP Total cost Direct material 468500 3.60 1686600 Conversion 468500 2.42 1133770 Total cost transferred out 2820370 Cost of ending work in process EUP Cost per EUP Total cost Direct material 31500 3.60 113400 Conversion 17500 2.42 42350 Total cost of ending work in process 155750 Total cost assigned 2976120

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