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	65,000	$	54,200	$	21,800	$	32,300
Units started in process	619,000
Units transferred out	640,000
Work in process inventory, ending	44,000
Cost added during the month		$	717,220	$	269,480	$	398,000

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 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. (Round your answers to 2 decimal places.)

Answer 1

Solution

	Material	Labor	Overhead
Equivalent units	670,800	662,000	662,000
Cost per Equivalent units	$                  1.15	$                        0.44	$               0.65

Working

Statement of Equivalent Units(Weighted average)
		Transferred In		Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	640,000	100%	640,000.0	100%	640,000.0	100%	640,000
Ending WIP	44,000	70%	30,800.0	50%	22,000.0	50%	22,000
Total	684,000		670,800	Total	662,000.0	Total	662,000

.

	Transferred In	Material	Conversion cost
Work in process beginning (A)	$         54,200.00	$        21,800.00	$       32,300.00
Cost added during may (B)	$       717,220.00	$      269,480.00	$     398,000.00
Total Cost (C=A+B)	$       771,420.00	$      291,280.00	$     430,300.00
Equivalent units of production (D)	670,800	662,000.0	662,000
Cost per Equivalent unit (C/D)	$                    1.15	$                   0.44	$                  0.65