Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments Fordm

Question

Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments. The second department (Polishing) had the following physical flow schedule for December: Units to account for: Units, beginning work in process Units started Total units to account for 4,000 (40% complete) Units accounted for: Units, ending work in process 8,000 (50% complete) Units completed Units accounted for Costs in beginning work in process for the Polishing Department were direct materials,4,000; conversion costs, s6,000; and transferred in,8,000. Costs added during the month: direct materials, $33,000; conversion costs, $48,000; and transferred in, $40,000 Required: 1. Assuming the use of the weighted average method, prepareschedule of equivalent units. Enter percentages as whole numbers. Fordman Company Schedule of Equivalent Units For the month of December Direct Materials Conversion Costs Transferred In Units completed 16,000 | Ending WIP: 8,000 |Vx| 50|V % | 4,000 | 4,000 | 8,000 Total equivalent units 20,000 20,000 | 24.000 V Feedback 2. Compute the unit cost for the month. If required, round your answer to the nearest cent 0 per equivalent unit

Explanation / Answer

Calculate unit cost :

Unit cost = 1.85+2.70+2 = $6.55 per equivalent unit

Direct material Conversion Transferred in Beginning work in process 4000 6000 8000 Cost added 33000 48000 40000 Total cost 37000 54000 48000 Equivalent unit 20000 20000 24000 Cost per equivalent unit 1.85 2.70 2

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