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 34,500 units in inventory, 80% complete as to materials and 20% complete as to conversion costs. The beginning inventory cost of $79,100 consisted of $56,200 of direct materials costs and $22,900 of conversion costs.

During the month, the forming department started 490,000 units. At the end of the month, the forming department had 30,000 units in ending inventory, 85% complete as to materials and 35% 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	$	79,100
Direct materials added during the month		1,800,200
Conversion added during the month		1,179,000

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.

Answer 1

Solution 1:

Equivalent units of production (EUP) - FIFO method
	Units	% material	EUP-Materials	% Conversion	EUP- Conversion
units in process, Jbeginninh	34500	20%	6900	80%	27600
Units started and completed during month (490000- 30000)	460000	100%	460000	100%	460000
Toal units completed and transferred out			466900		487600
Units in process, Ending	30000	85%	25500	35%	10500
Equivalent units of production			492400		498100

Solution 2:

Cost per Equivalent unit:	Material	Conversion
Cost added during the cuurent period	$18,00,200	$11,79,000
/Equivalent units of Production	492400	498100
Cost per Equivalent unit of Production	$3.66	$2.37