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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, beginning63,000$54,400$22,100$26,900
Units started in process599,000
Units transferred out620,000
Work in process inventory, ending42,000
Cost added during the month$719,840$272,760$332,060

The beginning work in process inventory was 80% complete withrespect to materials and 65% complete with respect to labor andoverhead. The ending work in process inventory was 60% completewith respect to materials and 50% 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

Answer & Explanation Solved by verified expert
4.3 Ratings (782 Votes)

Requirement 1

Statement of Equivalent Units
Material Labor Overheads
Units Complete % Equivalent units Complete % Equivalent units Complete % Equivalent units
Transferred                25,000 100%                 25,000 100%                25,000 100%            25,000
Closing WIP                  8,000 60%                   4,800 50%                  4,000 50%              4,000
Total                33,000 Total                 29,800 Total                29,000 Total            29,000

Requirement 2

Cost per Equivalent Units
COST Material Labor Overheads TOTAL
Beginning WIP Inventory Cost $      54,400.00 $     22,100.00 $      26,900.00 $         1,03,400.00
Cost incurred during period $ 7,19,840.00 $ 2,72,760.00 $   3,32,060.00 $      13,24,660.00
Total Cost to be accounted for $ 7,74,240.00 $ 2,94,860.00 $   3,58,960.00 $      14,28,060.00
Total Equivalent Units                29,800               29,000                 29,000
Cost per Equivalent Units $              25.98 $             10.17 $               12.38

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