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 $ 64,800 Labor $ 27,900 Overhead $ 34,600 Work in process inventory, beginning Units started in process Units transferred out Work in process inventory, ending Cost added during the month Units 64,000 609,000 630,000 43,000 $ 856,330 $ 343,735 $ 426,740 The beginning work in process inventory was 85% complete with respect to materials and 70% complete with respect to labor and overhead. The ending work in process inventory was 65% 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.)

Answer 1

1) Computation of Equivalent units of production Materials % completed EUP [B] [ AB ] 100% 630,000 65% 27,950 657,950 Physical Units [A] 630,000 43,000 673,000 Equivalent Units Labor % completed L EUP [C] [ A C] 100% 630,000 25% 10,750 640,750 Overhead % completed EUP [D] (A D] 100% 630,000 25% 10,750 640,750 Units completed and transferred out Ending work in process Total Materials 657,950 Labor 6 40,750 Overhead 640,750 Equivalent units of production 2) Cost per equivalent units of production $ Beginning work in process Cost added during the month Total Cost (a) Equivalent units of production (b) Cost per equivalent units (a/b) Materials 64,800 $ 856,330 921,130 $ 657,950 1.40 $ Labor Overhead 27,900 $ 34,600 343,735 426,740 371,635 $ 461,340 640,750 640,750 0.58 $ 0.72 3 $ $ Materials $ Labor $ Overhead $ Cost per equivalent units of production 1.40 0.58 0.72

Note: EUP - Equivalent units of production