Answer:
Fordman Company
1-a. A Schedule of Equivalent Units (Weighted-Average Method)
Equivalent units of production:
Units Direct Materials Conversion
Units completed 16,000 16,000 16,000
Ending WIP 8,000 4,000 4,000
Total equivalent units 20,000 20,000
1-b. The unit cost for the month of December is:
= $7.05
Step-by-step explanation:
a) Data and Calculations:
Units transferred from Grinding Department = 20,000
Cost of units transferred = $40,000
Polishing Department's
Physical Flow Schedule for December:
Units to account for:
Units, beginning work in process 4,000 (40% complete)
Units started 20,000
Total units to account for 24,000
Units accounted for:
Units, ending work in process 8,000 (50% complete)
Units completed 16,000 (100% complete)
Units accounted for 24,000
Cost of production:
Direct Conversion Transferred Total
Materials In
Beginning work in process $5,000 $6,000 $8,000 $19,000
Current period 32,000 50,000 40,000 122,000
Total costs of production $37,000 $56,000 $48,000 $141,000
Equivalent units of production:
Units Direct Materials Conversion
Units completed 16,000 16,000 16,000
Ending WIP 8,000 4,000 4,000
Total equivalent units 20,000 20,000
Cost per equivalent units:
Direct Materials Conversion Total
& Transferred In
Total costs of production $85,000 $56,000 $141,000
Total equivalent units 20,000 20,000
Cost per equivalent units $4.25 $2.80
Cost assigned to: Direct Materials Conversion Total
& Transferred In
Units completed $68,000 $44,800 $112,800
($4.25 * 16,000) ($2,80 * 16,000)
Ending WIP 17,000 11,200 28,200
($4.25 * 4,000) ($2.80 * 4,000)
Total $85,000 $56,000 $141,000
Unit cost for the month of December:
Total cost of completed units = $112,800
Total units completed = 16,000
Unit cost = $7.05 ($112,800/16,000