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	79,000	$	75,100	$	36,400	$	49,100
Units started in process	751,000
Units transferred out	800,000
Work in process inventory, ending	30,000
Cost added during the month		$	1,557,385	$	612,440	$	688,995

The beginning work in process inventory was 70% complete with respect to materials and 55% complete with respect to labor and overhead. The ending work in process inventory was 50% complete with respect to materials and 30% 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	79000
	Units started during the period	751000
	Units to be accounted for	830000
		Actual Units	Equivalent Units
			Material	Labour	Overhead
	Units Completed and Transferred	800000
	From units in beginning inventory	79000	23700	35550	35550
	From units started	721000	721000	721000	721000
	Units in ending inventory	30000	15000	9000	9000
1)	Equivalnet Units	830000	759700	765550	765550
	Costs:
		Total	Material	Labour	Overhead
	Costs in beginning inventory	0	0	0
	Cost added dueing the year	2858820	1557385	612440	688995
	Total cost to account for	2858820	1557385	612440	688995
	Equivalent Units from above		759700	765550	765550
2)	Cost per equivalnet unit	3.75	2.05	0.80	0.90
		Total	Material	CC
C)	Cost Accounted for
	Units completed and transfer	0	0	0
	From units in beginning inventory	77025	48585	28440
	From units started	2054850	1478050	576800
	Units in ending inventory	37950	30750	7200
	Total Cost Accounted for	2169825	1557385	612440