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	97,000	$	101,200	$	54,300	$	69,600
Units started in process	918,000
Units transferred out	940,000
Work in process inventory, ending	75,000
Cost added during the month		$	1,674,620	$	850,465	$	995,225

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:

Assume that the company uses the FIFO method in its process costing system.

1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.

2. Compute the first department's cost per equivalent unit for materials, labor, overhead, and in total for the month. (Round your answers to 2 decimal places.)

Answer 1

1
	Materials	Labor	Overhead
To complete Work in process inventory, beginning	9700	24250	24250
Units started and completed	843000	843000	843000
Work in process inventory, ending	52500	37500	37500
Equivalent units of production	905200	904750	904750
2
	Materials	Labor	Overhead	Total
Cost added during the month	1674620	850465	995225
Divided by Equivalent units of production	905200	904750	904750
Cost per equivalent unit	1.85	0.94	1.10	3.89
Formulas used for 1:
To complete Work in process inventory, beginning	=97000*10%	=97000*25%	=97000*25%
Units started and completed	=940000-97000	=940000-97000	=940000-97000
Work in process inventory, ending	=75000*70%	=75000*50%	=75000*50%