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 $ 68,400 Labor $ 30,200 Overhead $ 41,900 Work in process inventory, beginning Units started in process Units transferred out Work in process inventory, ending Cost added during the month Units 76,000 719,000 740,000 55,000 $ 904,725 $ 372,370 $ 517,225 The beginning work in process inventory was 90% complete with respect to materials and 75% complete with respect to labor and overhead. The ending work in process inventory was 70% complete with respect to materials and 10% 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

Solution

	Material	Labor	Overhead
Equivalent units of production	778,500	745,500	745,500
Cost per Equivalent unit	$                    1.25	$                   0.54	$                  0.75

Working

Statement of Equivalent Units(Weighted average)
		Material		Labor		Overhead
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	7,40,000	100%	7,40,000.0	100%	7,40,000.0	100%	7,40,000
Closing WIP	55,000	70%	38,500.0	10%	5,500.0	10%	5,500
Total	7,95,000		7,78,500	Total	7,45,500.0	Total	7,45,500

.

	Material	Labor	Overhead
Work in process beginning (A)	$         68,400.00	$        30,200.00	$       41,900.00
Cost added during may (B)	$     9,04,725.00	$    3,72,370.00	$   5,17,225.00
Total Cost (C=A+B)	$     9,73,125.00	$    4,02,570.00	$   5,59,125.00
Equivalent units of production	7,78,500	7,45,500.0	7,45,500
Cost per Equivalent unit (C/D)	$                    1.25	$                   0.54	$                  0.75