Question

! Required information Use the following information for the Exercises below. [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 36,000 units in inventory. 65% complete as to materials and 35% complete as to conversion costs. The beginning inventory cost of $81,100 consisted of $57,400 of direct materials costs and $23.700 of conversion costs. During the month, the forming department started 510,000 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 Direct materials added during the month Conversion added during the month $ 81,100 1,879,400 1,214,320 Exercise 03-6 Weighted average: Cost per EUP and costs assigned to output LO C2 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the equivalent units of production for the forming department. Direct Materials Conversion Required Required 2 >

Answer 1

Answer:- Equivalent production

When the units could not be completed fully at the reporting Date then this incomplete units are converted into equivalent productions by multiplying with their respective Degree of completion.

1. Equivalent units of production (EP)are as follows :-

EP(i) = finished units + WIP (i)

WIP units (i) = Total WIP * DOC (i)

Where

i = cost category with respect to which the WIP units are being calculated

DOC = Degree of completion

Total WIP = Total work in progress = 40000

Calculation of completed units :-

Opening Total WIP = 36000

Add:- units introduced= 510000

Less:- closing Total WIP = 40000

Units completed = 506000

For Material

WIP units (Material) = 40000 × 80% = 32000

EP (Material) = 32000 + 506000= 538000

For conversion cost

WIP Units (conversion) = 40000 × 30% = 16000

EP(conversion) = 12000 + 506000 =518000

2. As per weighted average cost per unit of equivalent production :-

C(i) = Total cost (i) /EP(i)

C(Material) = Total Material cost/ EP(Material)

= 57400 + 1879400 / 538000

= $ 3.6 per EP(m)

C(conversion) = Total conversion cost / EP (conversion)

= 23700 + 1214320 /518000

= $2.39 per EP(C)

3. Cost of Units finished and transferred

= Transferred Units * (EP(m) + EP(C))

=506000 *(3.6+2.39)

= 506000*5.99

=3030940

Cost of closing WIP = WIP units (m) * EP(m) + WIP units (C) * EP (C)

= 32000 * 3.6 + 16000 * 2.39

= 115200 + 38240

= 153440