Pureform, Inc., manufactures a product that passes through two departments. Data

Question

Pureform, Inc., manufactures a product that passes through two departments. Data for a recent month for the first department follow Units Work in process inventory, beginning 60,000 $ 67,300 $ 11,400 $ 21,000 569,000 590,000 39,000 Materials Labor Overhead Units started in process Units transferred out Work in process inventory, ending Cost added during the month $ 985,775 $225,800 $ 254,025 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: Assume that the company uses the FIFO method of accounting for units and costs 1. Compute the equivalent units for the month for the first processing department. Materials Labor Overhead Equivalent units of production 2. Determine the costs per equivalent unit for the month. (Round your answers to 2 decimal places.) Materials Labor Overhead Cost per equivalent unit

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 60,000 Add: Units Started in Process 569,000 Total Units to account for: 629,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 60000 Units started and completed 530,000 Ending Work in Process 39,000 Total Units to be accounted for: 629,000 Equivalent Units: Material Cost Labour and Conversion % Completion Units % Completion Units Units completed from Beg. WIP 10% 6,000 25% 15,000 Units started and completed 100% 530,000 100% 530,000 Ending Work in Process 70% 27,300 50% 19,500 Total Equivalent units 563,300 564,500 COST PER EQUIVALENT UNIT: Material Labour Conversion Total cost added during the year 985,775 225,800 254,025 Equivalent Units 563,300 564,500 564,500 Cost per Equivalent unit 1.75 0.4 0.45 Req 1 Material labouor Overheads Equivalent units 563300 564500 564500 Req 2 Material labouor Overheads Cost per Equivalent units 1.75 0.4 0.45

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