The Fields Company has two manufacturing departments, forming and painting. The company uses the FIFO method of process costing. At the beginning of the month, the forming department has 25,000 units in inventory, 60% complete as to materials and 40% complete as to conversion costs. The beginning inventory cost of $60,100 consisted of $44,800 of direct material costs and $15,300 of conversion cost. During the month, the forming department started 300,000 units. At the end of the month, the forming department had 30,000 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 is as follows: Beginning work in process inventory $ 60,100 Direct materials added during the month 1,231,200 Conversion added during the month 896,700 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. (Round your answer to 2 decimal places.)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
|
The Fields Company has two manufacturing departments, forming and painting. The company uses the FIFO method of |
|
During the month, the forming department started 300,000 units. At the end of the month, the forming department had 30,000 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 is as follows: |
| Beginning work in process inventory | $ | 60,100 |
| Direct materials added during the month | 1,231,200 | |
| Conversion added during the month | 896,700 | |
| 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. (Round your answer to 2 decimal places.) |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
