Question

Pureform, Inc., 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	61,000	$49,700.00	$10,600.00	$24,300.00
Units started in process	579,000
Units transferred out	600,000
Work in process inventory, ending	40,000
Cost added during month		$657,100.00	$130,160.00	$300,060.00

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 weighted-average method of accounting for units and costs.

1.	Compute the equivalent units for the month for the first 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
Equivalent units of production

Answer 1

1

Compute the equivalent units for the month for the first department.

Statement of equivalent production under weighted average method:

2

Determine the costs per equivalent unit for the month.

	Equivalent Units	Cost Incurred, Previous Period	Total, Current Period	Cost per unit
	(A)	(B)	©	D= ((b)+©)/A
Element of Cost
Direct material	620000	49,700	657,100	1.14
Labor	612000	10,600	130,160	0.23
Overhead Expenses	612000	24,300	300,060	0.53
Total				1.9