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	63,000	$	54,400	$	22,100	$	26,900
Units started in process	599,000
Units transferred out	620,000
Work in process inventory, ending	42,000
Cost added during the month		$	719,840	$	272,760	$	332,060

The beginning work in process inventory was 80% complete with respect to materials and 65% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 50% 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

Answer 1

Requirement 1

Statement of Equivalent Units
		Material		Labor		Overheads
	Units	Complete %	Equivalent units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	25,000	100%	25,000	100%	25,000	100%	25,000
Closing WIP	8,000	60%	4,800	50%	4,000	50%	4,000
Total	33,000	Total	29,800	Total	29,000	Total	29,000

Requirement 2

Cost per Equivalent Units
COST	Material	Labor	Overheads	TOTAL
Beginning WIP Inventory Cost	$      54,400.00	$     22,100.00	$      26,900.00	$         1,03,400.00
Cost incurred during period	$ 7,19,840.00	$ 2,72,760.00	$   3,32,060.00	$      13,24,660.00
Total Cost to be accounted for	$ 7,74,240.00	$ 2,94,860.00	$   3,58,960.00	$      14,28,060.00
Total Equivalent Units	29,800	29,000	29,000
Cost per Equivalent Units	$              25.98	$             10.17	$               12.38