Question

I have seen two solutions to this problem and each state the number 295,000 x 100% for completed units and transferred. The problem does not state where the number 295,000 comes from. This would be helpful information so I can understand how this problem was solved. Please show all calculations so I can have a clear understanding of how to arrive at the solutions for this multi-part problem. Thank you.

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 25,000 units in inventory, 60% complete as to materials and 40% complete as to conversion costs. The beginning inventory cost of $60,100 consisted of $44,800 of direct materials costs and $15,300 of conversion costs.

During the month, the forming department started 300,000 units. At the end of the month, the forming department had 30,000 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	$	60,100
Direct materials added during the month		1,231,200
Conversion added during the month		896,700

1. Calculate the equivalent units of production for the forming department. Direct Materials Conversion

Direct Materials
Conversion

2. Calculate the costs per equivalent unit of production for the forming department. Direct Materials per EUP Conversion per EUP

Direct Materials		per EUP
Conversion		per EUP

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.

Cost Assignment and Reconciliation
Cost of units, transferred out	EUP	Cost per EUP	Total cost
Direct Materials
Conversion
Total costs transferred out
Costs of ending work in process	EUP	Cost per EUP	Total cost
Direct Materials
Conversion
Total cost of ending work in process
Total costs assigned

Answer 1

Requirement 1

	Material	Conversion
Equivalent Units of Production	3,19,000	3,04,000

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$                    4.00	$              3.00

Requirement 3

Cost Assignment and Reconciliation
Cost of units, transferred out	EUP	Cost per EUP	Total cost
Direct Materials	295000	$     4.00	$ 11,80,000.00
Conversion	295000	$     3.00	$   8,85,000.00
Total costs transferred out				$ 20,65,000.00
Costs of ending work in process	EUP	Cost per EUP	Total cost
Direct Materials	24000	$     4.00	$      96,000.00
Conversion	9000	$     3.00	$      27,000.00
Total cost of ending work in process				$   1,23,000.00
Total costs assigned				$   21,88,000.00

Working

Reconciliation of Units
A	Opening WIP	25,000
B	Introduced	3,00,000
C=A+B	TOTAL	3,25,000
D	Transferred	2,95,000
E=C-D	Closing WIP	30,000

Statement of Equivalent Units
				Transferred in cost		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	2,95,000			100%	2,95,000.0	100%	2,95,000
Closing WIP	30,000			80%	24,000.0	30%	9,000
Total	3,25,000			Total	3,19,000.0	Total	3,04,000

Cost per Equivalent Units
COST		Transferred in cost	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$         44,800	$        15,300	$           60,100
Cost incurred during period		$   12,31,200	$     8,96,700	$     21,27,900
Total Cost to be accounted for		$   12,76,000	$     9,12,000	$     21,88,000
Total Equivalent Units		3,19,000	3,04,000
Cost per Equivalent Units		$              4.00	$             3.00	$                7.00

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Transferred in cost	$                    4.00	24,000	$        96,000	$       2,95,000	$       11,80,000
Conversion cost	$                    3.00	9,000	$        27,000	$       2,95,000	$         8,85,000
TOTAL	$          21,88,000	TOTAL	$     1,23,000	TOTAL	$       20,65,000