Fields Company has two manufacturing departments. forming and painting. The comp

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 25000 units in inventory, 60% complete as to materials and 40% complete as to conversion costs. The beginning inventory cost of $60,100 consisted of $4,800 of direct material costs and $15,300 of conversion cost. 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: 1. Calculate the equivalent units of production for the forming department. 2. Calculate the costs per equivalent units of production for the forming department. 3. Using the weighted-average method assign costs to the forming department output--specifically, is units transferred to painting and its ending work in process inventory.

Explanation / Answer

1)Units transfered out = 25000 + 300000 - 30000 = 295000

3) Units transfered out = [ 295000 (4+3)] = 295000*7 = 2065000.

cost of ending WIP :material +conversion cost

                      = (4 * 24000 ) +(3*9000)

                       = 96000 + 27000

                        = $ 123000

Material conversion cost Units transfered out 295000 295000 Ending WIP 24000   [30000*.80] 9000     [30000*.30] Equivalent unit (ans to par 1) 319000 304000 Cost 1276000   [1231200+44800] 912000    [896700+15300] equivalent cost per unit [Ans to part 2 ] 1276000/319000 = $ 4 per unit 912000 / 304000 = $ 3 per unit

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