Question

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 27,000 units in inventory, 80% complete as to materials and 20% complete as to conversion costs. The beginning inventory cost of $63,200 consisted of $47,200 of direct materials costs and $16,000 of conversion costs. During the month, the forming department started 339,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 85% complete as to materials and 35% 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 $ 63,200 1,349,600 956,400 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

Working:

Units to account for:
Beginning work in process	27000
Units started this period	339000
Total units to account for	366000
Units accounted for:
Units completed and transferred out	326000
Ending work in process	40000
Total units accounted for	366000

1	Equivalent Units of Production for Forming Department
		Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
	Units completed and transferred out	326000	100%	326000	100%	326000
	Ending work in process	40000	85%	34000	35%	14000
	Equivalent units of production			360000		340000
2	Cost per EUP	Materials	Conversion	Total cost
	Cost of beginning work in process	47200	16000	63200
	Costs incurred this period	1349600	956400	2306000
	Total costs	1396800	972400	2369200
	÷ Equivalent units of production	360000	340000
	Cost per equivalent unit of production	3.88	2.86	6.74
3	Cost Assignment and Reconciliation
	Cost of units transferred out	EUP	Cost per EUP	Total cost
	Direct materials	326000	3.88	1264880
	Conversion	326000	2.86	932360
	Total costs transferred out				2197240
	Costs of ending work in process	EUP	Cost per EUP	Total cost
	Direct materials	34000	3.88	131920
	Conversion	14000	2.86	40040
	Total cost of ending work in process				171960
	Total costs assigned				2369200