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 86,000 $ 84,000 $ 41,900 $ 55,600 Units started in process 819,000 Units transferred out 840,000 Work in process inventory, ending 65,000 Cost added during the month $ 1,111,425 $ 516,500 $ 686,025 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 50% 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. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.

	Physical unit	%	EUP-material	%	EUP-labour	%	EUP-overhead
Units transferred out	840000	100%	840000	100%	840000	100%	840000
Ending work in process	65000	70%	45500	50%	32500	50%	32500
Total	905000		885500		872500		872500

2. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month.

	Material	Labour	Overhead
Beginning work in process	84000	41900	55600
Cost added during period	1111425	516500	686025
Total cost	1195425	558400	741625
Equivalent unit	885500	872500	872500
Cost per equivalent unit	1.35	0.64	0.85