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 30,000 units in inventory, 65% complete as to materials and 35% complete as to conversion costs. The beginning inventory cost of $61,000 consisted of $45,000 of direct materials costs and $16,000 of conversion costs.

During the month, the forming department started 300,000 units. At the end of the month, the forming department had 35,000 units in ending inventory, 90% complete as to materials and 20% 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	$	61,100
Direct materials added during the month		1,261,000
Conversion added during the month		890,000

Calculate the equivalent units of production for the forming department.

	Direct Materials Conversion

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

	Direct Materials per EUP Conversion per EUP

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

a)
	Direct Materials			3,26,500
	Conversion			3,02,000
	Working:
	Beginning units			30,000
	Units started			3,00,000
	Total			3,30,000
	Ending Units			35,000
	Units completed			2,95,000
	As per weighted average method,
	Equivalent units of production (EUP)				=	Units transferred out+Ending Units x % of completion
	So,
	Equivalent units of production (EUP) for:
	Direct Materials		=	2,95,000	+	35,000	x	90%	=	3,26,500
	Conversion		=	2,95,000	+	35,000	x	20%	=	3,02,000
b)
	Direct Materials		$       4.00	per EUP
	Conversion		$       3.00	per EUP
	Working:
				Beginning Work in process			Costs added during the period				Total Costs		/	EUP	=	Cost per EUP
	Direct Materials			$        45,000			$       12,61,000				$       13,06,000		/	3,26,500	=	$       4.00
	Conversion			$        16,000			$          8,90,000				$          9,06,000		/	3,02,000	=	$       3.00
	Total										$       22,12,000					$       7.00
c)	Cost Assignmnet and Reconcilation
	Cost of units transferred out:					EUP	Cost per EUP	Total Cost
	Direct Materials					2,95,000	$ 4.00	$       11,80,000
	Conversion					2,95,000	$ 3.00	$ 8,85,000	$ 20,65,000
	Total cost transferred out
	Cost of Ending work in process:
	Direct Materials					31,500	$ 4.00	$          1,26,000
	Conversion					7,000	$ 3.00	$             21,000	$   1,47,000
	Total cost of ending work in process
	total Cost assigned								$ 22,12,000