The Fields Company has two manufacturing departments, forming and painting. The
ID: 2336077 • Letter: T
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 35,000 units in inventory, 75% complete as to materials and 25% complete as to conversion costs. The beginning inventory cost of $83,100 consisted of $58,600 of direct materials costs and $24,500 of conversion costs.
During the month, the forming department started 530,000 units. At the end of the month, the forming department had 30,000 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 is as follows:
These are the questions:
Beginning work in process inventory Direct materials added during the month Conversion added during the month $ 83,100 1,908,400 1,244,540Explanation / Answer
Materials
Conversion
Physical units
Work added this period
Equivalent units
Work added this period
Equivalent units
Opening Work in progress
35,000 units
25%
8,750 units
75%
26,250 units
Total units stated
530,000 units
Total started and completed during the period
500,000 units
100%
500,000units
100%
500,000units
Closing work In progress
30,000 units
90%
27,000 units
40%
12,000 units
Total
565,000 units
535,750 units
538,250 units
Equivalent units of production:
Direct materials
535,750 units
Conversion
538,250 units
2. Calculation of cost per equivalent units of production
Total cost
Equivalent completed units
Cost per Equivalent unit of production
Direct materials
$ 1,967,000
535,750 units
$ 3.67 per EUP
Conversion
$ 1,269,040
538,250 units
$ 2.36 per EUP
Materials
Conversion
Physical units
Work added this period
Equivalent units
Work added this period
Equivalent units
Opening Work in progress
35,000 units
25%
8,750 units
75%
26,250 units
Total units stated
530,000 units
Total started and completed during the period
500,000 units
100%
500,000units
100%
500,000units
Closing work In progress
30,000 units
90%
27,000 units
40%
12,000 units
Total
565,000 units
535,750 units
538,250 units
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