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 30,000 units in inventory, 65% complete as to materials and 35% complete as to conversion costs. The beginning inventory cost of $61,000 consisted of $45,000 of direct materials costs and $16,000 of conversion costs.

During the month, the forming department started 300,000 units. At the end of the month, the forming department had 35,000 units in ending inventory, 90% complete as to materials and 20% 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:

Calculate the equivalent units of production for the forming department.

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

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.

Beginning work in process inventory $ 61,100 Direct materials added during the month 1,261,000 Conversion added during the month 890,000

Explanation / Answer

a) Direct Materials         3,26,500 Conversion         3,02,000 Working: Beginning units            30,000 Units started         3,00,000 Total         3,30,000 Ending Units            35,000 Units completed         2,95,000 As per weighted average method, Equivalent units of production (EUP) = Units transferred out+Ending Units x % of completion So, Equivalent units of production (EUP) for: Direct Materials =         2,95,000 +        35,000 x 90% = 3,26,500 Conversion =         2,95,000 +        35,000 x 20% = 3,02,000 b) Direct Materials $       4.00 per EUP Conversion $       3.00 per EUP Working: Beginning Work in process Costs added during the period Total Costs / EUP = Cost per EUP Direct Materials $        45,000 $       12,61,000 $       13,06,000 / 3,26,500 = $       4.00 Conversion $        16,000 $          8,90,000 $          9,06,000 / 3,02,000 = $       3.00 Total $       22,12,000 $       7.00 c) Cost Assignmnet and Reconcilation Cost of units transferred out: EUP Cost per EUP Total Cost Direct Materials     2,95,000 $ 4.00 $       11,80,000 Conversion     2,95,000 $ 3.00 $ 8,85,000 $ 20,65,000 Total cost transferred out Cost of Ending work in process: Direct Materials        31,500 $ 4.00 $          1,26,000 Conversion           7,000 $ 3.00 $             21,000 $   1,47,000 Total cost of ending work in process total Cost assigned $ 22,12,000

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