Question

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 30,000 units in inventory, 80% complete as to materials and 20% complete as to conversion costs. The beginning inventory cost of $69,100 consisted of $50,200 of direct materials costs and $18,900 of conversion costs.

During the month, the forming department started 390,000 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 follows.

Beginning work in process inventory	$	69,100
Direct materials added during the month		1,507,160
Conversion added during the month		1,031,660

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.

Calculate the equivalent units of production for the forming department.

	Direct Materials Conversion

Calculate the costs per equivalent unit of production for the forming department. (Round your answers to 2 decimal places.)

	Direct Materials per EUP Conversion per EUP

Answer 1

Answer

• Working

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	40,000	80.0%	32,000	30.0%	12,000
Units STARTED & COMPLETED	350,000	100%	350,000	100%	350,000
Units of beginning WIP	30,000	20.00%	6,000	80.00%	24,000
Equivalent Units of Production			388,000		386,000
COST per EUP			Material		Conversion
Cost incurred this period			$    1,507,160.00		$              1,031,660.00
Total Costs		Costs	$    1,507,160.00	Costs	$              1,031,660.00
Equivalent units of production		EUP	388,000	EUP	386,000
Cost per EUP			$             3.88443		$                          2.6727

• Requirement 1: Equivalent unit

Direct material = 388000
Conversion = 386000

• Requirement 2: Cost per Equivalent unit
• Direct material = $ 3.88 per EUP
  Conversion = $ 2.67 per EUP