Question

Use the following information for the Exercises below.

[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	$	60,100
Direct materials added during the month		1,231,200
Conversion added during the month		896,700

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.

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.

Answer 1

1	Equivalent Units of Production (EUP) - Weighted Average Method
		Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
	Units completed and transferred out	295000	100%	295000	100%	295000
	Ending work in process	30000	80%	24000	30%	9000
	Equivalent units of production			319000		304000
2	Cost per EUP	Materials	Conversion	Total cost
	Cost of beginning work in process	44800	15300	60100
	Costs incurred this period	1231200	896700	2127900
	Total costs	1276000	912000	2188000
	÷ Equivalent units of production	319000	304000
	Cost per equivalent unit of production	4.00	3.00	7.00
3	Cost Assignment and Reconciliation
	Cost of units transferred out	EUP	Cost per EUP	Total cost
	Direct materials	295000	4.00	1180000
	Conversion	295000	3.00	885000
	Total costs transferred out				2065000
	Costs of ending work in process	EUP	Cost per EUP	Total cost
	Direct materials	24000	4.00	96000
	Conversion	9000	3.00	27000
	Total cost of ending work in process				123000
	Total costs assigned				2188000

Working:

Units to account for
Beginning work in process	25000
Units started this period	300000
Total units to account for	325000
Total units accounted for
Units completed and transferred out	295000
Ending work in process	30000
Total units accounted for	325000