Pureform, Inc., uses the weighted-average method in its process costing system.
ID: 2342653 • 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 80% complete with respect to materials and 60% complete with respect to labor and overhead. The ending work in process inventory was 75% 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 5,000 $ 4,320 $ 1,040 $ 1,790 Units started in process 45,000 Units transferred out 42,000 Work in process inventory, ending 8,000 Cost added during the month $ 52,800 $ 21,500 $ 32,250Explanation / Answer
(1) First Dept Equivalent Units :-
Material
Labour & O/H
Beginning WIP
5000
5000
Units started & Completed
37000
37000
Ending WIP
(8000 * 75%)
=6000
(8000 * 50%)
=4000
Equivalent Units
48000
46000
(2) Cost per Equivalent Unit :-
Material
Labour & O/H
Cost incurrec during month
52800
53750
Cost of Beginning WIP
4320
2830
Total Cost (A)
57120
56580
Equivalent Units (B)
48000
46000
Cost per Eq Unit (A/B)
1.19
1.23
Material
Labour & O/H
Beginning WIP
5000
5000
Units started & Completed
37000
37000
Ending WIP
(8000 * 75%)
=6000
(8000 * 50%)
=4000
Equivalent Units
48000
46000
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