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.

Answer 1

1)

	Material	Labor	Overhead
Units completed and transfered out	560000	560000	560000
Ending work in process	19800    [55000*55%]	12600   [36000*35%]	12600
Equivalent unit	579800	572600	572600

2)

	Material	Labor	overhead
Beginning work in process	51000	19300	27900
cost added during the month	673750	238370	344290
Total cost	724750	257670	372190
equivalent unit	579800	572600	572600
cost per equivalent unit	1.25    [724750/579800]	.45   [257670/572600]	.65