Question

In: Accounting

The Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method...


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 37,000 units in inventory, 80% complete as to materials and 20% complete as to conversion costs. The beginning inventory cost of $84,100 consisted of $59,200 of direct materials costs and $24,900 of conversion costs.
During the month, the forming department started 540,000 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 is as follows:

Beginning work in process inventory $ 84,100
Direct materials added during the month 1,949,370
Conversion added during the month 1,254,270

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

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

Part 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

Solutions

Expert Solution

Requirement 1 :
UNITS TO ACCOUNT FOR:
Beginning Work in Process units 37,000
Add: Units Started in Process 540,000
Total Units to account for: 577,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed 537,000
Ending Work in Process 40,000
Total Units to be accounted for: 577,000
Equivalent Units:
Material Cost Conversion
% Completion Units % Completion Units
Units started and completed 100% 537,000 100% 537,000
Ending Work in Process 80% 32,000 30% 12,000
Total Equivalent units 569,000 549,000
Equivalent units
Material 569,000
Conversion 549,000
Requirement 2 :
TOTAL COST TO ACCOUNT FOR:
Material Conversion
Beginning work in Process 59,200 24,900
Cost Added during May 1,949,370 1,254,270
Total Cost to account for: 2,008,570 1,279,170
Total Cost to account for: 3,287,740
COST PER EQUIVALENT UNIT:
Material Conversion
Total cost added during the year 2,008,570 1,279,170
Equivalent Units 569,000 549,000
Cost per Equivalent unit 3.53 2.33
Cost per unit
Material 3.53
Conversion 2.33
Requirement 3 :
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (537000 units)
Equivalent unit Cost per EU Total Cost
Material 537,000 3.53 1895610
Conversion Cost 537,000 2.33 1251210
Total Cost of Units completed and transferred out: 3146820
Ending Work in process (40000 units)
Equivalent unit Cost per EU Total Cost
Material 32,000 3.53 112960
Conversion Cost 12,000 2.33 27960
Total cost of Ending Work in process: 140,920

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