Question

Pureform, Inc., uses the FIFO 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 65,000 $ 68,500 $ 5,700 $ 21,400 Units started in process 617,000 Units transferred out 610,000 Work in process inventory, ending 72,000 Cost added during the month $ 1,484,100 $ 268,290 $ 327,910 The beginning work in process inventory was 75% complete with respect to materials and 60% complete with respect to labor and overhead. The ending work in process inventory was 55% complete with respect to materials and 35% 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. Compute the first department's cost per equivalent unit for materials, labor, overhead, and in total for the month. (Round your answers to 2 decimal places.)

Answer 1

Requirement 1

	Materials	Labor	Overheads
Equivalent Units of Production	6,00,850	5,96,200	5,96,200

Requirement 2

Materials	Labor	Overheads	Total
$        2.47	$          0.45	$          0.55	$ 3.47

Working

STEP 1
Reconciliation of Units
	Units	% already completed		% completed this period		% completed this period
		Material	Labor	Overhead	Material	Labor	Overhead
Beginning WIP	65,000	75%	60%	60%	25%	40%	40%
Units introduced	6,17,000
Total units to be accounted for	6,82,000
Completed and Transferred unit	6,10,000	0%	0%		100%	100%	100%
Ending WIP	72,000	0%	0%		55%	35%	35%

STEP 2
Equivalent Units
	Total Units	Materials		Labor		Overheads
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	65,000	25%	16,250	40%	26,000	40%	26000
From units started/Introduced	5,45,000	100%	5,45,000	100%	5,45,000	100%	545000
Total	6,10,000		5,61,250		5,71,000		571000
	Total Units	Materials		Labor		Overheads
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	72,000	55%	39,600	35%	25,200	35%	25200
Total EUP	6,82,000		6,00,850		5,96,200		5,96,200

STEP 3
Cost per Equivalent Units
	Materials		Labor		Overheads
Cost incurred in Current Period	$ 14,84,100.00		$   2,68,290.00		$    3,27,910.00
Total Equivalent Units	6,00,850		5,96,200		5,96,200
Cost per Equivalent Units	$                  2.47		$                 0.45		$                  0.55