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 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
A. Calculate the equivalent units of production for the forming department. B. Calculate the costs per equivalent unit of production for the forming department.

Answer 1

· Requirement A

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	295,000	100%	295,000	100%	295,000
Units of ENDING WIP	30,000	80%	24,000	30%	9,000
Equivalent Units of Production			319,000		304,000

· Requirement B

COST per EUP			Material		Conversion
Cost of Beginning WIP			$          44,800.00		$                                  15,300.00
Cost incurred during the period			$    1,231,200.00		$                                896,700.00
Total Costs		Costs	$    1,276,000.00	Costs	$                                912,000.00
Equivalent units of production		EUP	319,000	EUP	304,000
Cost per EUP			$              4.00000		$                                      3.00000