Question

Pureform, Inc., uses the weighted-average method in its process costing system. It manufactures a product that...

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.)

Homework Answers

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
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