Question

fields company has two manufacturing departments, forming and painting. the company uses the weighted average method and it reports the following unit data for the forming department. units completed in the forming department are transferred to the painting department. units direct materials conversion percent complete percent complete beginning work in process inventory 34,500 80% 20% units started this period 490,000 completed and transferred out 494,500 ending work in process inventory 30,000 85% 35% production cost information for the forming department follows. beginning work in process direct materials $ 56,200 conversion 22,900 $ 79,100 costs added this period direct materials 1,800,200 conversion 1,179,000 2,979,200 total costs to account for $ 3,058,300 a. calculate the equivalent units of production for both direct materials and conversion for the forming department. b. calculate the costs per equivalent unit of production for both direct materials and conversion for the forming department. c. 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.

Answer 1

The equivalent units of production for both direct materials and conversion for the forming department is 369,000, 384,000. b. The costs per equivalent unit of production for both direct materials and conversion for the forming department is 4.898, 3.129.

Equivalent unit of material  and conversion

1. Equivalent unit of material  and conversion

Unit transferred out = 34,500+490000-30000

Unit transferred out= 394,500

Equivalent unit of material = 394,500+(30000×85%)

Equivalent unit of material= 369,000

Equivalent unit of conversion = 394,500+(30000×35%)

Equivalent unit of conversion = 384,000

2. Cost per equivalent unit

Material = (56,200+1,800,200)/379,000 = 4.898

Conversion = (22,900+1,179,000)/384,000 = 3.129

3. Total Cost assigned

Cost assignment and reconciliation

Cost of units transferred out  

Direct material= (394,500×4.898)

Direct material=1,932,261

Conversion=394,500×3.129

Conversion=1,234,391

Total Cost transferred out=1,932,261+1,234,391

Total Cost transferred out=3,166,652

Cost of ending work in process:

Direct material=(394,500-369,000)×4.898

Direct material=124,899

Conversion=(384,000-369,000)×3.129

Conversion=49,935

Total Cost of ending work in process= 124,899+49,935

Total Cost of ending work in process= 171,834

Hence:

Total Cost assigned=Total Cost transferred out+Total Cost of ending work in process

Total Cost assigned=3,166,652+171,834

Total Cost assigned=3,338,486

Therefore the equivalent units of production for both direct materials and conversion for the forming department is 369,000, 384,000. b. The costs per equivalent unit of production for both direct materials and conversion for the forming department is 4.898, 3.129.

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