Pureform, Inc., uses the weighted-average method in its process costing system.
ID: 2329466 • Letter: P
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:
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:
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.)
Units Materials Labor Overhead Work in process inventory, beginning 65,000 $ 54,200 $ 21,800 $ 32,300 Units started in process 619,000 Units transferred out 640,000 Work in process inventory, ending 44,000 Cost added during the month $ 717,220 $ 269,480 $ 398,000Explanation / Answer
Answer
Equivalent Units of production
Statement of Equivalent Units
Material
Labor
Overhead
Units
Complete %
Equivalent units
Complete %
Equivalent units
Complete %
Equivalent units
[A]
[B]
[C = A x B]
[D]
[E = A x D]
[F]
[G = A x F]
Transferred
640,000
100%
640,000
100%
640,000
100%
640,000
Closing WIP
44,000
70%
30,800
50%
22,000
50%
22,000
Total
684,000
Total
670,800 equivalent units
Total
662,000 equivalent units
Total
662,000 equivalent units
Cost per Equivalent Units
COST
Cost Transferred
Material
Conversion Cost
TOTAL
Beginning WIP Inventory Cost
$ 54,200.00
$ 21,800.00
$ 32,300.00
$ 108,300.00
Cost incurred during period
$ 717,220.00
$ 269,480.00
$ 398,000.00
$ 1,384,700.00
Total Cost to be accounted for (A)
$ 771,420.00
$ 291,280.00
$ 430,300.00
$ 1,493,000.00
Total Equivalent Units (B)
670,800
662,000
662,000
Cost per Equivalent Units (A / B)
$ 1.15
$ 0.44
$ 0.65
Materials
Labor
Overhead
1.
Equivalent units of production
670,800
662,000
662,000
2.
Cost per equivalent unit
$ 1.15
$ 0.44
$ 0.65
Statement of Equivalent Units
Material
Labor
Overhead
Units
Complete %
Equivalent units
Complete %
Equivalent units
Complete %
Equivalent units
[A]
[B]
[C = A x B]
[D]
[E = A x D]
[F]
[G = A x F]
Transferred
640,000
100%
640,000
100%
640,000
100%
640,000
Closing WIP
44,000
70%
30,800
50%
22,000
50%
22,000
Total
684,000
Total
670,800 equivalent units
Total
662,000 equivalent units
Total
662,000 equivalent units
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