Question

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 32,000 units in inventory, 65% complete as to materials and 35% complete as to conversion costs. The beginning inventory cost of $71,100 consisted of $51,400 of direct materials costs and $19,700 of conversion costs.

During the month, the forming department started 410,000 units. At the end of the month, the forming department had 30,000 units in ending inventory, 90% complete as to materials and 40% 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	$	71,100
Direct materials added during the month		1,564,120
Conversion added during the month		1,061,500

Exercise 16-6 Weighted average: Cost per EUP and costs assigned to output LO C2

1.
Calculate the equivalent units of production for the forming department.

	Direct Materials Conversion

2.
Calculate the costs per equivalent unit of production for the forming department.

	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 $0.00 0.00 Conversion $0.00 0.00 Total cost of ending work in process Total costs assigned

Answer 1

Solution 1:

Forming Department
Equivalent units of production (EUP) - Weighted Average method
	Units	% material	EUP-Materials	% Conversion	EUP- Conversion
Units Completed and transferred out (410000+32000-30000)	412000	100%	412000	100%	412000
units of Ending work in process	30000	90%	27000	40%	12000
Equivalent units of production			439000		424000

Solution 2:

Cost per Equivalent unit:	Material	Conversion
Cost of Beginning Work in Process	$51,400	$19,700
Cost added during June	$15,64,120	$10,61,500
Total Costs	$16,15,520	$10,81,200
/Equivalent units of Production	439000	424000
Cost per Equivalent unit of Production	$3.68	$2.55

Solution 3:

Cost Assignment and reconciliation
Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
Material	412000	$3.68	$15,16,160
Conversion	412000	$2.55	$10,50,600
Total transferred out			$25,66,760
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Material	27000	$3.68	$99,360
Conversion	12000	$2.55	$30,600
Total Ending work in process			$1,29,960
Total Costs assigned				$26,96,720