Exercise 49 Equivalent Units and Cost per Equivalent Unitwei

Exercise 4.9 Equivalent Units and Cost per Equivalent Unit-weighted-Average Method [LO42, LO43] Pureform, Inc .manufactures a product that passes through two departments, Data for a recent month for the first department follow Work in process inventory, beginning Units started in process Units transferred out Work in process inventory, ending Cost added during the month 86,000 $ 84,000 $ 41,900 S 55,600 819,000 840,000 65,000 $1,111,425 $ 516,500 $ 686,025 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 matenals 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 Materials Labor Overhead Equivalent units of production 2. Determine the costs per equivalent unit for the month. (Round your answers to 2 decimal places.) Materials Cost per equivalent unit

Solution

1. Under weighted average method,the cost is allocated between the units transferred out and the ending work-in- process.

Working:

2.

Working:

	Material	Conversion
Equivalent units of production	885500	872500