Question

Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments.

The second department (Polishing) had the following physical flow schedule for December:

Units to account for:
Units, beginning work in process 4,000 (40% complete)
Units started ?
Total units to account for ?
Units accounted for:
Units, ending work in process 8,000 (50% complete)
Units completed ?
Units accounted for ?

Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $50,000; and transferred in, $40,000.

Required:
Assuming the use of the weighted average method, prepare a schedule of equivalent units. Enter percentages as whole numbers.

Answer 1

Fordman Company

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

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

Total equivalent units 20,000 20,000

Cost per equivalent units $4.25 $2.80