Question

Pureform, Inc., manufactures a product that passes through two departments. Data for a recent month for the first department follow: Materials $ 54,800 Labor $ 22,400 Overhead $ 32,800 Work in process inventory, beginning Units started in process Units transferred out Work in process inventory, ending Cost added during the month Units 66,000 629,000 650,000 45,000 $ 876,820 $ 407,680 $439,040 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 of accounting for units and costs. 1. Compute the equivalent units for the month for the first processing department. Materials Labor Overhead Equivalent units of production 2. Determine the costs per equivalent unit for the month. (Round your answers to 2 decimal places.) Materials Labor Overhead Cost per equivalent unit

Answer 1

Solution

	Material	Labor	Overhead
Equivalent units	626,300	627,200	620,450

..

	Material	Labor	Overhead
Cost Per Equivalent units	$                    1.40	$               0.65	$               0.71

Working.

Reconciliation of Units
	Units	% already completed			% completed this period
		Material	Labor	Overhead	Material	Labor	Overhead
Beginning WIP	66,000	70%	55%	55%	30%	45%	45%
Units introduced	629,000
Total units to be accounted for	695,000
Completed and Transferred unit	650,000	0%	0%	0%	100%	100%	100%
Ending WIP	45,000	0%	0%	0%	50%	30%	30%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Labor		Overhead
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	66,000	30%	19,800	45%	29,700	45%	29,700
From units started/Introduced	584,000	100%	584,000	100%	584,000	100%	584,000
Total	650,000		603,800		613,700		613,700
	Total Units	Material		Labor		Overhead
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	45,000	50%	22,500	30%	13,500	30%	6,750
Total EUP	695,000		626,300		627,200		620,450

.

	Material	Labor	Overhead	Total
Total cost	$       876,820.00	$ 407,680.00	$ 439,040.00
Equivalent units	626,300	627,200	620,450
Cost oer Equivalent units	$                    1.40	$               0.65	$               0.71	$       2.76