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 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 97,000 $ 101,200 $ 54,300 $ 69,600 Units started in process 918,000 Units transferred out 940,000 Work in process inventory, ending 75,000 Cost added during the month $ 1,337,925 $ 669,050 $ 859,025

Explanation / Answer

Materials Labor Overhead 1) Equivalent units of production               9,92,500                9,77,500             9,77,500 Working: Materials Labor Overhead Physical Units % of completion Equivalent units of production % of completion Equivalent units of production % of completion Equivalent units of production Units Transferred out               9,40,000 100%             9,40,000 100%               9,40,000 100% 9,40,000 Work in process inventory, ending                   75,000 70%                52,500 50%                   37,500 50%      37,500 Total             10,15,000             9,92,500               9,77,500 9,77,500 2) Materials Labor Overhead Cost per Equivalent unit $                   1.45 $                    0.74 $                 0.95 Working: Materials Labor Overhead Work in process inventory $           1,01,200 $                54,300 $            69,600 Costs incurred duuring this period $         13,37,925 $            6,69,050 $        8,59,025 Total Costs $         14,39,125 $            7,23,350 $        9,28,625 / Equivalent units of production               9,92,500                9,77,500             9,77,500 Cost per equivalent unit $                   1.45 $                    0.74 $                 0.95

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