Pureform, Inc., uses the weighted-average method in its process costing system.

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 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 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.)

Units Materials Labor Overhead Work in process inventory, beginning 63,000 $ 54,400 $ 22,100 $ 26,900 Units started in process 599,000 Units transferred out 620,000 Work in process inventory, ending 42,000 Cost added during the month $ 802,980 $ 360,030 $ 420,035

Explanation / Answer

Pureform, Inc. company uses the FIFO method 1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month. Units Material Labor & Overhead % Units % Units Work in process - Beginning 63000 20% 12600 35% 22050 Units started    Completed and transferred out 557000 100% 557000 100% 557000    Work in process - Ending 42000 60% 25200 50% 21000    Equivalent Units of production 662000 594800 600050 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.) Material Labor & Overhead Total Cost added during the month $8,02,980 $7,80,065 $15,83,045    Equivalent Units of production 594800 600050 Cost per equivalent unit $1.35 $1.30 $2.65 Pureform, Inc. company uses the weighted-average method 1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month. Units to be accounted for Work in process - Beginning 63000 Units started in process 599000 Total units to be accounted 662000 Units accounted for Units Material Labor & Overhead % Units % Units Units completed and transferred out 620000 100% 620000 100% 620000 Work in process - Ending 42000 60% 25200 50% 21000    Equivalent Units of production 662000 645200 641000 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.) Cost to be accounted for Material Labor & Overhead Total Cost of work in beginning $54,400 $49,000 $1,03,400 Cost added during the month $8,02,980 $7,80,065 $15,83,045 Total cost to be accounted for $8,57,380 $8,29,065 $16,86,445    Equivalent Units of production 645200 641000 Cost per equivalent unit $1.33 $1.29 $2.62

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