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Pureform, Inc., uses the weighted-average method in its process costing system. It manufactures a product that...

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Accounting

Pureform, Inc., uses the weighted-average method in its processcosting system. It manufactures a product that passes through twodepartments. Data for a recent month for the first departmentfollow:

UnitsMaterialsLaborOverhead
Work in process inventory, beginning76,000$68,400$30,200$41,900
Units started in process719,000
Units transferred out740,000
Work in process inventory, ending55,000
Cost added during the month$904,725$372,370$517,225

The beginning work in process inventory was 90% complete withrespect to materials and 75% complete with respect to labor andoverhead. The ending work in process inventory was 70% completewith respect to materials and 10% complete with respect to laborand overhead.

Required:

1. Compute the first department's equivalent units of productionfor materials, labor, and overhead for the month.

2. Determine the first department's cost per equivalent unit formaterials, labor, and overhead for the month. (Round youranswers to 2 decimal places.)

Answer & Explanation Solved by verified expert
4.2 Ratings (644 Votes)

Solution

Material Labor Overhead
Equivalent units               778,500                     745,500            745,500

.

Material Labor Overhead
Cost per Equivalent units $                    1.25 $                   0.54 $                  0.75

Working

Statement of Equivalent Units(Weighted average)
Material Labor Overhead
Units Complete % Equivalent units Complete % Equivalent units
Transferred              740,000 100%            740,000.0 100%            740,000.0 100%            740,000
Closing WIP                55,000 70%               38,500.0 10%                5,500.0 10%                 5,500
Total              795,000                778,500 Total            745,500.0 Total            745,500

.

Material Labor Overhead
Work in process beginning (A) $         68,400.00 $        30,200.00 $       41,900.00
Cost added during may (B) $       904,725.00 $      372,370.00 $     517,225.00
Total Cost (C=A+B) $       973,125.00 $      402,570.00 $     559,125.00
Equivalent units of production (D)                 778,500            745,500.0               745,500
Cost per Equivalent unit (C/D) $                    1.25 $                   0.54 $                  0.75

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