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	5,000	$	4,320	$	1,040	$	1,790
Units started in process	45,000
Units transferred out	42,000
Work in process inventory, ending	8,000
Cost added during the month		$	52,800	$	21,500	$	32,250

The beginning work in process inventory was 80% complete with respect to materials and 60% complete with respect to labor and overhead. The ending work in process inventory was 75% 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. 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

• Requirement 1

Equivalent units:

EUP - FIFO Method	EUP Materials	EUP - Labor	EUP - Overhead
Equivalent Units of Production	44,000	43,000	43,000

Working

EUP - FIFO Method	Units	% Material	EUP Materials	% Labor	EUP - Labor	% Overhead	EUP - Overhead
Units of ENDING WIP	8,000	75.0%	6,000	50.0%	4,000	50.0%	4,000
Units STARTED & COMPLETED	37,000	100%	37,000	100%	37,000	100%	37,000
Units of beginning WIP	5,000	20.00%	1,000	40%	2,000	40%	2,000
Equivalent Units of Production			44,000		43,000		43,000

• Requirement 2

COST per EUP		Material	Labor	Overhead	TOTAL
Cost per EUP = ANSWER		$             1.20000	$                          0.5000	$                         0.7500	$                         2.45

Working---

COST per EUP			Material	Labor	Overhead
Cost incurred this period			$          52,800.00	$                    21,500.00	$                    32,250.00
Total Costs		Costs	$          52,800.00	$                    21,500.00	$                    32,250.00
Equivalent units of production		EUP	44,000	43,000	43,000
Cost per EUP = ANSWER			$             1.20000	$                          0.5000	$                         0.7500