1. Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments

   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, $7,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $47,000; and transferred in, $40,000.

   Required:

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

   Fordman Company Schedule of Equivalent Units For the month of December

   	Direct Materials	Conversion Costs	Transferred In
   Units completed
   Ending WIP:
   x %
   x %
   Total equivalent units

   Feedback

   To calculate equivalent units, weighted average counts prior-period output in BWIP as belonging to the current period. So all completed units are treated as output of the current period.

   2. Compute the unit cost for the month. If required, round your answer to the nearest cent. $ per equivalent unit

   Feedback

   The weighted average method counts prior-period work and costs in BWIP as if they belong to the current period; so the unit cost is obtained by dividing the sum of the costs in BWIP and the current-period costs by the weighted average equivalent output. The resulting unit cost is a blend of the prior-period unit cost and the actual current-period unit cost.

   Feedback

   Partially correct