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	61,000	$	49,700	$	10,600	$	24,300
Units started in process	579,000
Units transferred out	600,000
Work in process inventory, ending	40,000
Cost added during the month		$	894,815	$	289,225	$	347,070

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:

Assume that the company uses the FIFO method in its process costing system.

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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				61,000
Add: Units Started in Process				579,000
Total Units to account for:				640,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				61000
Units started and completed				539,000
Ending Work in Process				40,000
Total Units to be accounted for:				640,000
Equivalent Units:
			Material Cost		Labouor		Overheads
			% Completion	Units	% Completion	Units	% Completion	Units
Units completed from Beg. WIP			30%	18,300	45%	27,450	45%	27,450
Units started and completed			100%	539,000	100%	539,000	100%	539,000
Ending Work in Process			50%	20,000	30%	12,000	30%	12,000
Total Equivalent units				577,300		578,450		578,450
COST PER EQUIVALENT UNIT:
			Material	Labour	Overheads
Total cost added during the year			894,815	289,225	347,070
Equivalent Units			577,300	578,450	578,450
Cost per Equivalent unit			1.55	0.5	0.6
Total cost per Equivalent unit					2.65