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 $ 122, 200 $ 37,400 $ 50,300 Work in process inventory, beginning Units started in process 80,000 762,000 810, 000 32,000 Units transferred out Work in process inventory, ending Cost added during the month $ 392,700 $ 431,200 $1,650,340 The beginning work in process inventory was 75% complete with respect to materials and 60% complete with respect to labor and overhead. The ending work in process inventory was 55% 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. 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.) Total Materials Labor Overhead Equivalent units of production Cost per equivalent unit 1. 2.

Answer 1

Solution

		Material	Labor	Overhead
1	Equivalent units of production	827,600	818,000	818,000
2	Cost per Equivalent unit	$                    2.14	$                   0.53	$                  0.59

.Working

Statement of Equivalent Units(Weighted average)
		Material		Labor		Overhead
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	8,10,000	100%	8,10,000.0	100%	8,10,000.0	100%	8,10,000
Closing WIP	32,000	55%	17,600.0	25%	8,000.0	25%	8,000
Total	8,42,000		8,27,600	Total	8,18,000.0	Total	8,18,000

.

	Material	Labor	Overhead
Work in process beginning (A)	$     1,22,200.00	$        37,400.00	$       50,300.00
Cost added during may (B)	$   16,50,340.00	$    3,92,700.00	$   4,31,200.00
Total Cost (C=A+B)	$   17,72,540.00	$    4,30,100.00	$   4,81,500.00
Equivalent units of production (D)	8,27,600	8,18,000.0	8,18,000
Cost per Equivalent unit (C/D)	$                    2.14	$                   0.53	$                  0.59