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Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments Fordman Company has a product that passes...

Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments

Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments.

The second department (Polishing) had the following physical flow schedule for December:

Units to account for:
  Units, beginning work in process 4,000 (40% complete)
  Units started   ?
  Total units to account for   ?
Units accounted for:
  Units, ending work in process 8,000 (50% complete)
  Units completed   ?
  Units accounted for   ?

Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $9,000. Costs added during the month: direct materials, $32,000; conversion costs, $48,000; and transferred in, $39,000.

Required:

1. Assuming the use of the weighted average method, prepare a schedule of equivalent units. Enter percentages as whole numbers.

Fordman Company
Schedule of Equivalent Units
For the month of December
Direct Materials Conversion Costs Transferred In
Ending WIP:

x

%

x

%

2. Compute the unit cost for the month. If required, round your answer to the nearest cent.
$ per equivalent unit

Solutions

Expert Solution

The second department (Polishing) had the following physical flow schedule for December:

Units to account for:
  Units, beginning work in process 4,000 (40% complete)
  Units started 24000
  Total units to account for 28000
Units accounted for:
  Units, ending work in process 8,000 (50% complete)
  Units completed 20000
  Units accounted for 28000

. Assuming the use of the weighted average method, prepare a schedule of equivalent units. Enter percentages as whole numbers.

Fordman Company
Schedule of Equivalent Units
For the month of December
Direct Materials Conversion Costs Transferred In
Unit Transferred out 20000 20000 20000
Ending WIP:

x

100%

 8000 8000

x

50%

 4000
Equivalent unit 28000 24000 28000

2. Compute the unit cost for the month. If required, round your answer to the nearest cent.

Transferred in Cost per equivalent unit = (9000+39000)/28000 = 1.71

Direct material cost per equivalent unit = (5000+32000)/28000 = 1.32

Conversion Cost per equivalent unit = (6000+48000)/24000 = 2.25
$5.28 per equivalent unit

ekkarill92 answered 2 years ago
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