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 Materials Labor Overhead Work in process inventory, beginning 91,000 $ 92,400 $ 47,900 $ 62,400 Units started in process 869,000 Units transferred out 890,000 Work in process inventory, ending 70,000 Cost added during the month $ 1,222,200 $ 590,350 $ 770,100 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 weighted-average method of accounting for units and costs. 1. Compute the equivalent units for the month for the first department. 2. Determine the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)

Explanation / Answer

Calculation of Equivalent Units MATERIAL LABOUR OVERHEAD Opening Units 91000 91000 19000 Introduced & completed during the month 799000 799000 799000 Closing Units 49000 35000 35000 Total Equivalent Units 939000 925000 853000 Calculation of cost per equivalent unit MATERIAL LABOUR OVERHEAD TOTAL Opening Cost 92400 47900 62400 Cost Incurred during the month 1222200 590350 770100 Cost to be accounted for 1314600 638250 832500 Total Equivalent Units 939000 925000 853000 Unit Cost 1.4 0.69 0.98 3.07

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