The Fields Company has two manufacturing departments forming

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 36,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $82,100 consisted of $58,000 of direct materials costs and $24,100 of conversion costs.

During the month, the forming department started 520,000 units. At the end of the month, the forming department had 40,000 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 is as follows:

Solution

1) Calculate equivalent unit :

Material = 516000+(40000*85%) = 550000 Units

Conversion = 516000+(40000*35%) = 530000 Units

2) Calculate cost per equivalent unit

Direct material = (58000+1889000)/550000 = 3.54

Conversion = (24100+1226700)/530000 = 2.36

3) Prepare cost reconciliation report :