Question

1. 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	4,000	(40% complete)
   Units started	?
   Total units to account for	?
   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, $5,000; conversion costs, $6,000; and transferred in, $9,000. Costs added during the month: direct materials, $32,000; conversion costs, $48,000; and transferred in, $39,000.

   Required:

   1. Assuming the use of the weighted average method, prepare a schedule 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
   Total equivalent units Units completed
   Ending WIP:
   x %
   x %
   Total equivalent units Units completed

   Feedback

   2. Compute the unit cost for the month. If required, round your answer to the nearest cent.
   $ per equivalent unit

Answer 1

1
Schedule of Equivalent Units
	Direct Materials	Conversion Costs	Transferred In
Units completed	16000	16000	16000	=4000+20000-8000
Ending WIP:
8000 X 50%	4000	4000
8000 X 100%			8000
Total equivalent units	20000	20000	24000
2
	Direct Materials	Conversion Costs	Transferred In	Total
Costs in beginning work in process	5000	6000	9000
Costs added during the month	32000	48000	39000
Total costs	37000	54000	48000
Divide by Equivalent units	20000	20000	24000
Cost per Equivalent unit	1.85	2.70	2.00	6.55
$6.55 per equivalent unit