Question

Required information Use the following information for the Exercises below. The following information applies to the questions displayed below.) 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 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 is as follows: $ Beginning work in process inventory Direct materials added during the month Conversion added during the month 69,100 1,507,160 1,031,660

Answer 1

Calculate units completed and transferred out during the month as follows:

Units in beginning inventory	30000
Add: Units started during the month	390000
Total	420000
Less: Units in the ending inventory	40000
Units completed and transferred out	380000

Now calculate the required answers in the following manner:

1. Calculate the equivalent units of production for the forming department.
Direct materials	412000
Conversion	392000
2. Calculate the cost per equivalent unit of production for the forming department.
Direct materials	3.78
Conversion	2.68
3. Using the weighted-average method, assign costs to the forming department's output.
Cost Assignment and Reconciliation
Cost of units transferred out	EUP	Cost per EUP	Total Cost
Direct materials	380000	3.78	1436400
Conversion	380000	2.68	1018400
Total costs transferred out				2454800
Costs of ending work in process
Direct materials	32000	3.78	120960
Conversion	12000	2.68	32160
Total cost of ending work in process				153120
Total costs assigned				2607920

The figures shown above have been calculated as follows:

1. Calculate the equivalent units of production for the forming department.
Direct materials	=380000+(40000*80%)
Conversion	=380000+(40000*30%)
2. Calculate the cost per equivalent unit of production for the forming department.
Direct materials	=(50200+1507160)/412000
Conversion	=(18900+1031660)/392000
3. Using the weighted-average method, assign costs to the forming department's output.
Cost Assignment and Reconciliation
Cost of units transferred out	EUP	Cost per EUP	Total Cost
Direct materials	380000	3.78	=380000*3.78
Conversion	380000	2.68	=380000*2.68
Total costs transferred out				=1436400+1018400
Costs of ending work in process
Direct materials	=40000*80%	3.78	=32000*3.78
Conversion	=40000*30%	2.68	=12000*2.68
Total cost of ending work in process				=120960+32160
Total costs assigned				=2454800+153120