Required information The following information applies to the questions displaye

Question

Required information 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 31,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $72,100 consisted of $52,000 of direct materials costs and $20,100 of conversion costs During the month, the forming department started 420,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 80% complete as to materials and 30% 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 $ 72,190 1,631,40e 1,079,700

Explanation / Answer

1) Direct Materials 4,43,000 Conversion 4,23,000 Working: As per weighted average method, Equivalent units of production (EUP) = Units completed + Ending Units x Percentage of completion So, Equivalent units of production(EUP) of: Direct Materials 4,11,000 +            40,000 x 80% =       4,43,000 Conversion 4,11,000 +            40,000 x 30% =       4,23,000 Working: Units in beginning work in process              31,000 Units started during the period           4,20,000 Total           4,51,000 Less:Units in ending work in process              40,000 Units completed and transferred out           4,11,000 2) Direct Materials $       3.80 Conversion $       2.60 Working: Direct Materials Conversion Beginning work in process                     52,000           20,100 Costs incurred during the period               16,31,400     10,79,700 Total Costs               16,83,400     10,99,800 / Total Equivalent units (EUP)                 4,43,000       4,23,000 Cost per equivalent unit                         3.80               2.60 3) Cost assignment and reconcilation: EUP Cost per EUP Total Cost Cost of units transferred out: Direct Materials 4,11,000                 3.80        15,61,800 Conversion 4,11,000                 2.60        10,68,600               26,30,400 Total cost transferred out Costs of Ending work in process: Direct Materials      32,000                 3.80           1,21,600 Conversion      12,000                 2.60              31,200                 1,52,800 Total cost of ending work in process Total Cost Assigned               27,83,200

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