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 37,000 units in inventory, 80% complete as to materials and 20% complete as to conversion costs. The beginning inventory cost of $84,100 consisted of $59,200 of direct materials costs and $24,900 of conversion costs.

During the month, the forming department started 540,000 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	$	84,100
Direct materials added during the month		1,949,370
Conversion added during the month		1,254,270

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

DirectMaterials
Conversion

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

Direct materials		Per EUP
Conversion		Per EUP

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

Ques 1
	Direct Materials	Conversion
Units completed transferred out
(537000*100%)	537000	537000
Ending WIP	32000	12000
(40000*80%/30%)
Equivalent units	569000	549000

working:

Opening	37000
add:started	540000
Less:closing	40000
Completed	537000

Ques 2
	Direct Materials	Conversion
Beginning WIP	$                     59,200	$                24,900
Cost incurred this period	$               1,949,370	$          1,254,270
total costs(a)	$               2,008,570	$          1,279,170
Equivalent units(b)	569000	549000
Cost per equivalent unit(a/b)	$                          3.53	$                     2.33

Ques 3
COST assignment and reconciliation
Costs of units tfd out
Direct materials	$               1,895,610	(537000*3.53)
Convestion costs	$               1,251,210	(537000*2.33)
Total costs transferred out	$               3,146,820
Cost of ending WIP
Direct materials	$                   112,960	(40000*3.53)
Convestion costs	$                     27,960	(40000*2.33)
Total costs of ending WIP	$                   140,920
Total costs assigned	$               3,287,740