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 36,000 units in inventory, 65% complete as to materials and 35% complete as to conversion costs. The beginning inventory cost of $81,100 consisted of $57,400 of direct materials costs and $23,700 of conversion costs.
During the month, the forming department started 510,000 units. At the end of the month, the forming department had 40,000 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 follows.
Beginning work in process inventory $ 81,100
Direct materials added during the month 1,879,400
Conversion added during the month 1,214,320
Required:
1. Calculate the equivalent units of production for the forming department.2. Calculate the costs per equivalent unit of production for the forming department.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.

Fields Company

Forming Department’s Equivalent Units of Production

Weighted Average Method

Particulars           Units           % of completion            Equivalent Units

                                             Materials Conversion  Materials   Conversion

Ending Inv          40000           80             30                 32000      12000

Transferred       506,000         100              100            506,000      506000

Total Equivalent Units                                                  538,000       518000

Equivalent units of Production can be calculated by adding the ending inventory units and transferred out unit. It can also be calculated by adding beginning units and units started into production.

Costs             Total               Materials          Conversion

Beg. Inv         $ 81,100            $ 57400           $ 23700

Added                                     $1879400        $1214320

Total                                       $1936800         $ 1238020

Total Equivalent Units        538,000                  518000

Per unit                                  $ 3.6                  $  2.39          

We have calculated the cost per equivalent unit by adding the costs for materials and conversion and dividing it with the equivalent number of units.

Costs Accounted For

Transferred units (36000+ 510,000- 40,000) = 506,000

Material = 506,000 * $3.6= 1821600

Conversion = 506000* $2.39= 1209340

Ending Inventory Costs

Materials = 40,000* 80%*3.6=  32000*3.6= $ 115,200

Conversion = 40,000* 30% *$ 2.39= 12000*$ 2.39=$ 28680

Total Materials = 1821600+$ 115,200= $ 1936800

Conversion= $ 1209340+$ 28680= $ 1238020

Which is the same as above.

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