Question

CHECK fine following information applies to the questions displayed below. 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 25,000 units in inventory. 60% complete as to materials and 40% complete as to conversion costs. The beginning inventory cost of $60,100 consisted of $44,800 of direct materials costs and $15,300 of conversion costs. During the month, the forming department started 300,000 units. At the end of the month, the forming department had 30,000 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 follows. Beginning work in process inventory Direct materials added during the month Conversion added during the month $ 60,100 1,231,200 896,700 Exercise 03-7A FIFO: Costs per EUP LO C4 Assume that Fields uses the FIFO method of process costing. 1. Calculate the equivalent units of production for the forming department. 2. Calculate the costs per equivalent unit of production for the forming department,

Answer 1

	Using FIFO
		Statement of equivalent production
		Particulars		Input units	Particulars	Output units	Equivalent Production
							Materials		Conversion costs
							%	Equivalent units	%	Equivalent units
		Opening WIP		25,000	From Opening WIP	25,000	40%	10,000	60%	15,000
		Units introduce		300,000	From Fresh inputs	270,000	100%	270,000	100%	270,000
					Units completed	295,000
					Closing WIP	30,000	80%	24,000	30%	9,000
					EQUIVALENT PRODUCTION UNITS			304,000		294,000
		Statement of Cost.		Material	Coversion Cost	Total
		Cost incurred		$1,231,200	$896,700	$2,127,900
		Total Cost(A)		$1,231,200	$896,700	$2,127,900
		Equivalent units(B)		$304,000	$294,000
		Cost per equivalent (A)/(B)		$4.05	$3.05	$7.10
		Cost statement
		Particulars	Equivalent Units(material)	Equivalent Units(conversion)	Cost per material equivalent unit	Cost per conversion cost equivalent unit	Amount
	(i)	Opening WIP completed during the period	10,000	15,000	$4.05	$3.05	$86,250
		Add: Cost of WIP at beginning	-	-	$44,800	$15,300	$60,100
		Completed Cost of 25,000 units of opening WIP	25000	25000			$146,350
		Completely processed units	270,000	270,000	$4.05	$3.05	$1,917,000
		Closing WIP	24,000	9,000	$4.05	$3.05	$124,650