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: Materials $ 68,900 Labor $ 31,500 Overhead $ 43,500 Work in process inventory, beginning Units started in process Units transferred out Work in process inventory, ending Cost added during the month Units 77,000 729,000 750,000 56,000 $ 911,380 $ 388,700 $ 537,140 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 25% 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.) Materials Labor Overhead 1. Equivalent units of production 2. Cost per equivalent unit

Answer 1

(1) The first department's equivalent units of production for materials, labor, and overhead for the month.:

Particular	Materials	Labor	Overhead
Units transferred out	750,000	750,000	750,000
Work in progress inventory, ending( see notes )	28000	14000	14000
Equivalent unit of production	778,000	764,000	764,000

Notes:Given ending Work in progress inventory was 50% complete with respect to material and 25% complete with respect to labor and overhead. Thus:

Work in progress inventory ending with respect of :

Materials 56000*50%=28000

Labor 56000*25%=14000

Overhead 56000*25%=14000

(2) The first department's cost per equivalent unit for materials, labor, and overhead for the month.

Particular	Material	Labor	Overhead
Total cost( see notes)	$980,280	$420,200	$580,640
Equivalent units of production	778,000	764,000	764,000
Cost per equivalent unit	1.26	0.55	0.76

Note:Calculation of total cost:

Material = $68,900 + $911,380 = $980,280

Labor = $31,500 + $388,700 = $420,200

Overhead = $43,500 + $537,140= $580,640