Question

Required information [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 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 Direct materials added during the month Conversion added during the month 0, 100 1,231,200 896,700 Assume that Fields uses the FIFO method of process costing.

Answer 1

Requirement 1

	Equivalent unit
Direct material	304,000
Conversion	294,000

Requirement 2

Direct material	$ 4.05	Per EUP
Conversion	$ 3.05	Per EUP

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	25,000	60%	40%	40%	60%
Units introduced	300,000
Total units to be accounted for	325,000
Completed and Transferred unit	295,000	0%	0%	100%	100%
Ending WIP	30,000	0%	0%	80%	30%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	25,000	40%	10,000	60%	15,000
From units started/Introduced	270,000	100%	270,000	100%	270,000
Total	295,000		280,000		285,000
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	30,000	80%	24,000	30%	9,000
Total EUP	325,000		304,000		294,000

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 1,231,200		$ 896,700		$ 2,127,900
Total Equivalent Units	304,000		294,000
Cost per Equivalent Units	$ 4.05		$ 3.05		$ 7.10