Question

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Use the following information for the Exercises below.

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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 32,000 units in inventory, 65% complete as to materials and 35% complete as to conversion costs. The beginning inventory cost of $71,100 consisted of $51,400 of direct materials costs and $19,700 of conversion costs.

During the month, the forming department started 410,000 units. At the end of the month, the forming department had 30,000 units in ending inventory, 90% complete as to materials and 40% 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	$	71,100
Direct materials added during the month		1,564,120
Conversion added during the month		1,061,500

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

	Direct Materials Conversion

2Calculate 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.

	Cost Assignment and Reconciliation Cost of units transferred out EUP Cost per EUP Total cost Direct materials Conversion Total costs transferred out Costs of ending work in process EUP Cost per EUP Total cost Direct materials $0.00 0.00 Conversion $0.00 0.00 Total cost of ending work in process Total costs assigned

Answer 1

1. Equivalent units:

	Material	Conversion
Units completed	412,000	412,000
Ending WIP
30,000 X 90%	27,000
30,000 X 40%		12,000
Equivalent units	439,000	424,000

2.Cost per equivalent unit:

	Material	Conversion
Beginning WIP	$51,400	$19,700
Cost added during the month	$1,564,120	$1,061,500
Total cost account for	$1,615,520	$1,081,200
÷ Equivalent units	439,000	424,000
= Cost per equivalent unit	$3.68	$2.55

3. Cost assigned and reconciliation:

Cost of units transferred out	EUP	Cost per EUP	Total cost
Direct materials	412,000	$3.68	$1,516,160
Conversion	412,000	$2.55	$1,050,600
Total cost transferred out			$2,566,760
Cost of ending work in process	EUP	Cost per EUP	Total cost
Direct materials	27,000	$3.68	$99,360
Conversion	12,000	$2.55	$30,600
Total cost of ending work in process			$129,960
Total costs assigned			$2,696,720

Calculations:

Beginning units	32,000
Units Started durigng the month	410,000
Ending units	-30,000
Units completed	412,000