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:

Units Materials Labor Overhead
Work in process inventory, beginning 64,000 $64,800 $27,900 $34,600
Units started in process 609,000
Units transferred out 630,000
Work in process inventory, ending 43,000
Cost added during the month $856,330 $343,735 $426,740

The beginning work in process inventory was 85% complete with respect to materials and 70% complete with respect to labor and overhead. The ending work in process inventory was 65% complete with respect to materials and 25% complete with respect to labor and overhead.

Required:
a. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.
b. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month.

Answer 1

Pureform, Inc.

Materials Labor Overhead

a. Equivalent units of production 657,950 640,750 640,750

b. Cost per equivalent unit $1.4 $0.58 $0.67

Step-by-step explanation:

a) Data and Calculations:

Units

Work in process inventory, beginning 64,000

Units started in process 609,000

Units available for processing 673,000

Units transferred out 630,000

Work in process inventory, ending 43,000

Materials Labor Overhead

Work in process inventory, beginning $64,800 $27,900 $34,600

Cost added during the month $856,330 $343,735 $426,740

Total production costs for the month $921,130 $371,635 $430,200

Equivalent units of production:

Units Materials Labor Overhead

Units transferred out 630,000 630,000 630,000 630,000

Work in process inventory, ending 43,000 27,950 10,750 10,750

Equivalent units of production 657,950 640,750 640,750

Cost per equivalent unit:

Materials Labor Overhead

Total production costs for the month $921,130 $371,635 $430,200

Equivalent units of production 657,950 640,750 640,750

Cost per equivalent unit $1.4 $0.58 $0.67