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

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 29,000 units in inventory, 75% complete as to materials and 25% complete as to conversion costs. The beginning inventory cost of $68,100 consisted of $49,600 of direct material costs and $18,500 of conversion cost.

During the month, the forming department started 380,000 units. At the end of the month, the forming department had 38,000 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:

Beginning work in process inventory $ 68,100

Direct materials added during the month 1,206,520

Conversion added during the month 908,380

1. Calculate the equivalent units of production for the forming department.

2. Calculate the costs per equivalent unit of production for the forming department. (Round your answer to 2 decimal places.)

3. 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. (Round your "costs per equivalent unit" to two decimal places and use the rounded answer in further computations.)

Explanation / Answer

Solution.

1. Calculate the equivalent units of production for the forming department..

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

Transferred- Direct Conversion in Materials Costs Transferred out (A)       371,000        371,000 Units as at 31 December (B)          38,000           38,000 Percentage of completion (C)              0.90               0.40 Equivalent units as at 31 Dec (D=B×C)          34,200           15,200 Total equivalent units (A+D)       405,200        386,200

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