Pure form. Inc., manufactures a product that passes through two departments. Dat
ID: 2414889 • Letter: P
Question
Pure form. Inc., 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 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 20% complete with respect to labor and overhead. Assume that the company uses the FIFO method of accounting for units and costs. Compute the equivalent units for the month for the first processing department. Determine the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)Explanation / Answer
Solution :
quantity schedule
As at beg
81,000
Transferred in
774,000
Units to be accounted for
855,000
Transferred out from units from beg
81,000
Units both started and completed during the current period
749,000
(855000-81000-25000)
As at end
25,000
1.calculation of equivalent units
Materials
Labour
overhead
Units in beginning WIP (A)
81,000
81,000
81,000
% of completion of beginning WIP in previous period (B)
85%
70%
70%
% of beginning WIP completed this period [C=100%-B]
15%
30%
30%
Equivalent units in beginning WIP [D=A×C]
12150
20250
20250
Units both started and completed in current period (E)
749,000
749,000
749,000
Units of ending WIP (F)
25,000
25,000
25,000
Percentage of completion of ending WIP (G)
65%
20%
20%
Equivalent units in ending WIP (H=F×G)
16,250
5,000
5,000
Total equivalent units (D+E+H)
777,400
774,250
774,250
2.cost per equivalent unit.
Materials
Labour
overhead
Total
1788020
272405
311320
2371745
Total equivalent units (J)
777,400
774,250
774,250
Cost per equivalent unit (I/J)
2.30
0.35
0.40
3.05
quantity schedule
As at beg
81,000
Transferred in
774,000
Units to be accounted for
855,000
Transferred out from units from beg
81,000
Units both started and completed during the current period
749,000
(855000-81000-25000)
As at end
25,000
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