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 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: 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				79,000
Add: Units Started in Process				751,000
Total Units to account for:				830,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				79000
Units started and completed				721,000
Ending Work in Process				30,000
Total Units to be accounted for:				830,000
Equivalent Units:
			Material Cost		Labour		Conversion
			% Completion	Units	% Completion	Units	% Completion	Units
Units completed from Beg. WIP			30%	23,700	45%	35,550	45%	35,550
Units started and completed			100%	721,000	100%	721,000	100%	721,000
Ending Work in Process			50%	15,000	30%	9,000	30%	9,000
Total Equivalent units				759,700		765,550		765,550
COST PER EQUIVALENT UNIT:
			Material	Labour	Overheads	TOTAL
Total cost added during the year			1,557,385	612,440	688,995
Equivalent Units			759,700	765,550	765,550
Cost per Equivalent unit			2.05	0.8	0.9	3.75