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	$	70,200	$	39,600	$	53,000
Units started in process	814,000
Units transferred out	820,000
Work in process inventory, ending	80,000
Cost added during the month		$	928,000	$	488,640	$	654,160

The beginning work in process inventory was 80% complete with respect to materials and 65% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 40% 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.

	Material	Labour	Overhead
Unit transferred out	820000	820000	820000
Ending work in process	80000*60% = 48000	80000*40% = 32000	80000*40% = 32000
Equivalent unit of production	868000	852000	852000

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	70200	39600	53000
Cost added	928000	488640	654160
Total Cost	998200	528240	707160
Equivalent unit	868000	852000	852000
Cost per equivalent unit	1.15	0.62	0.83