Question

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 35,000 units in inventory, 60% complete as to materials and 40% complete as to conversion costs. The beginning inventory cost of $80,100 consisted of $56,800 of direct materials costs and $23,300 of conversion costs.

During the month, the forming department started 500,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 90% complete as to materials and 40% complete as to conversion. Units completed in the forming department are transferred to the painting department.

Cost information for the forming department follows.

Beginning work in process inventory	$	80,100
Direct materials added during the month		1,828,250
Conversion added during the month		1,192,880

Assume that Fields uses the FIFO method of process costing.

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

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. (Round your answers to 2 decimal places.)

	Direct Materials   per EUP Conversion   per EUP

Answer 1

Units Reconciliation
Units to account for:
Beginning WIP	35,000
Units started this period	500,000
Total Units to account for	535,000
Total Units accounted for:
Completed & Transferred out	495,000
Ending WIP	40,000
Total Units accounted for	535,000

• [1]

DM = 510000
Conversion = 497000

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	40,000	90.0%	36,000	40.0%	16,000
Units STARTED & COMPLETED	460,000 [495000 – 35000]	100%	460,000	100%	460,000
Units of beginning WIP	35,000	40.00%	14,000	60%	21,000
Equivalent Units of Production			510,000		497,000

• [2]

DM = $ 3.58 per EUP
Conversion = $ 2.40 per EUP

COST per EUP			Material		Conversion
Cost incurred this period			$    1,828,250.00		$              1,192,880.00
Total Costs		Costs	$    1,828,250.00	Costs	$              1,192,880.00
Equivalent units of production		EUP	510,000	EUP	497,000
Cost per EUP			$             3.58480		$                          2.4002