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 5,000 $4,320 $1,040 $1,790
Units started in process 45,000
Units transferred out 42,000
Work in process inventory, ending 8,000
Cost added during the month $52,800 $21,500 $32,250

The beginning work in process inventory was 80% complete with respect to materials and 60% complete with respect to labor and overhead. The ending work in process inventory was 75% 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.
Compute the equivalent units for the month for the first department.

Materials Labor Overhead
Equivalent units of production ? ? ?

Answer 1

Answer:

48,000 units ; 46,000 units ; 46,000 units

Explanation:

The computation of the equivalent units is shown below:

For Material

= Units transferred out × completion percentage + ending work in process units × completion percentage

= 42,000 × 100% + 8,000 × 75%

= 42,000 units + 6,000 units

= 48,000 units

For Labor

= Units transferred out × completion percentage + ending work in process units × completion percentage

= 42,000 × 100% + 8,000 × 50%

= 42,000 units + 4,000 units

= 46,000 units

For Overhead  

= Units transferred out × completion percentage + ending work in process units × completion percentage

= 42,000 × 100% + 8,000 × 50%

= 42,000 units + 4,000 units

= 46,000 units