Question

Pureform, Inc., uses the weighted-average method in its process costing system. It manufactures a product that passes through two departments. Data for a recent month for the first department follow:

	Units	Materials		Labor		Overhead
Work in process inventory, beginning	76,000	$	68,400	$	30,200	$	41,900
Units started in process	719,000
Units transferred out	740,000
Work in process inventory, ending	55,000
Cost added during the month		$	904,725	$	372,370	$	517,225

The beginning work in process inventory was 90% complete with respect to materials and 75% complete with respect to labor and overhead. The ending work in process inventory was 70% complete with respect to materials and 10% complete with respect to labor and overhead.

Required:

1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.

2. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month. (Round your answers to 2 decimal places.)

Answer 1

Solution

	Material	Labor	Overhead
Equivalent units	778,500	745,500	745,500

.

	Material	Labor	Overhead
Cost per Equivalent units	$                    1.25	$                   0.54	$                  0.75

Working

Statement of Equivalent Units(Weighted average)
		Material		Labor		Overhead
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	740,000	100%	740,000.0	100%	740,000.0	100%	740,000
Closing WIP	55,000	70%	38,500.0	10%	5,500.0	10%	5,500
Total	795,000		778,500	Total	745,500.0	Total	745,500

.

	Material	Labor	Overhead
Work in process beginning (A)	$         68,400.00	$        30,200.00	$       41,900.00
Cost added during may (B)	$       904,725.00	$      372,370.00	$     517,225.00
Total Cost (C=A+B)	$       973,125.00	$      402,570.00	$     559,125.00
Equivalent units of production (D)	778,500	745,500.0	745,500
Cost per Equivalent unit (C/D)	$                    1.25	$                   0.54	$                  0.75