Question

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

Required information [The 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 35,000 units in inventory, 60% complete as to materials and 40% complete as to conversion costs. The beginning inventory cost of $80,100 consisted of $56,800 of direct materials costs and $23,300 of conversion costs. During the month, the forming department started 500,000 units. At the end of the month, the forming department had 40,000 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 follows. $ Beginning work in process inventory Direct materials added during the month Conversion added during the month 80, 100 1,828,250 1,192,880 1. Calculate the equivalent units of production for the forming department. 2. Calculate the costs per equivalent unit of production for the forming department. 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

Solution 1:

Forming Department
Equivalent units of production (EUP) - Weighted Average method
	Units	% material	EUP-Materials	% Conversion	EUP- Conversion
Units Completed and transferred out (35000+500000-40000)	495000	100%	495000	100%	495000
units of Ending work in process	40000	90%	36000	40%	16000
Equivalent units of production			531000		511000

Solution 2:

Cost per Equivalent unit:	Material	Conversion
Cost of Beginning Work in Process	$56,800	$23,300
Cost added	$1,828,250	$1,192,880
Total Costs	$1,885,050	$1,216,180
/Equivalent units of Production	531000	511000
Cost per Equivalent unit of Production	$3.55	$2.38

Solution 3:

Cost Assignment and reconciliation
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
Material	495000	$3.55	$1,757,250
Conversion	495000	$2.38	$1,178,100
Total transferred out			$2,935,350
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Material	36000	$3.55	$127,800
Conversion	16000	$2.38	$38,080
Total Ending work in process			$165,880
Total costs assigned				$3,101,230