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	79,000	$	99,000	$	34,200	$	46,700
Units started in process	749,000
Units transferred out	770,000
Work in process inventory, ending	58,000
Cost added during the month		$	1,309,400	$	421,230	$	576,520

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		Overhead
	Units	Complete %	Equivalent units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	770,000	100%	770,000.0	100%	770,000.0	100%	770,000.0
Closing WIP	58,000	60%	34,800.0	50%	29,000.0	50%	29,000.0
Total	828,000	Total	804,800.0	Total	799,000.0	Total	799,000.0

• Requirement 2

Cost per Equivalent Units
COST	Material	Labor	Overhead	TOTAL
Beginning WIP Inventory Cost	$             99,000.00	$          34,200.00	$              46,700.00	$          179,900.00
Cost incurred during period	$       1,309,400.00	$        421,230.00	$            576,520.00	$      2,307,150.00
Total Cost to be accounted for	$       1,408,400.00	$        455,430.00	$            623,220.00	$      2,487,050.00
Total Equivalent Units	804,800	799,000	799,000
Cost per Equivalent Units = ANSWER	$                   1.7500	$                0.5700	$                    0.7800	$                  3.1000