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	68,000	$	68,700	$	22,800	$	32,900
Units started in process	649,000
Units transferred out	670,000
Work in process inventory, ending	47,000
Cost added during the month		$	804,750	$	239,590	$	409,825

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 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. 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

	Pureform Inc.
	Production Cost Report (FIFO)
		Actual Units
	Caluclation of Physical UNITS:
	Units in begining inventory	68000
	Units started during the period	649000
	Units to be accounted for	717000
		Actual Units	Equivalent Units
			Material	Labour	Overhead
	Units Completed and Transferred	670000
	From units in beginning inventory	68000	13600	23800	23800
	From units started	602000	602000	602000	602000
	Units in ending inventory	47000	28200	4700	4700
1)	Equivalnet Units	717000	643800	630500	630500
	Costs:
		Total	Material	Labour	Overhead
	Costs in beginning inventory	0	0	0
	Cost added dueing the year	1455165	805750	239590	409825
	Total cost to account for	1455165	805750	239590	409825
	Equivalent Units from above		643800	630500	630500
2)	Cost per equivalnet unit	2.28	1.25	0.38	0.65