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	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. 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

• Requirement 1

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Labor	EUP - Labor	% Overhead	EUP - Overhead
Units TRANSFERRED	42,000	100%	42,000	100%	42,000	100%	42,000
Units of ENDING WIP	8,000	75%	6,000	50%	4,000	50%	4,000
Equivalent Units of Production = ANSWER			48,000		46,000		46,000

• Requirement 2

COST per EUP			Material	Labor	Overhead
Cost of Beginning WIP			$             4,320.00	$                                    1,040.00	$                                    1,790.00
Cost incurred during the period			$          52,800.00	$                                  21,500.00	$                                  32,250.00
Total Costs		Costs	$          57,120.00	$                                  22,540.00	$                                  34,040.00
Equivalent units of production		EUP	48,000	46,000	46,000
Cost per EUP = Answer			$              1.19000	$                                     0.49000	$                                      0.74000