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:

	Units	Materials		Labor		Overhead
Work in process inventory, beginning	57,000	$	51,000	$	19,300	$	27,900
Units started in process	539,000
Units transferred out	560,000
Work in process inventory, ending	36,000
Cost added during the month		$	673,750	$	238,370	$	344,290

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 35% 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)
		Material		Labor		Overhead
	Units	Percentage of Completion	Equivalent units of Production	Percentage of Completion	Equivalent units of Production	Percentage of Completion	Equivalent units of Production
Units completed and Transfered out	560,000	100%	560,000	100%	560,000	100%	560,000
Work in process inventory, Ending	36,000	55%	19,800	35%	12,600	35%	12,600
Total	596,000	Total	579,800	Total	572,600	Total	572,600

2)
Particulars	Material	Labor	Overhead
Work in Process Inventory,Beginning	$ 51,000	$ 19,300	$ 27,900
Add: Cost added during the month	$ 673,750	$ 238,370	$ 344,290
Total Cost to be accounted for (A)	$ 724,750	$ 257,670	$ 372,190
Total Equivalent Units (B)	579,800	572,600	572,600
Cost per Equivalent Unit (A / B )	$ 1.25	$ 0.45	$ 0.65