EXERCISE 4–8 Equivalent Units and Cost per Equivalent Unit—Weighted-Average Method

[ LO2 , LO3 ]

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, beginning .............................. 5,000 $4,320 $1,040 $1,790 Units started in process ................................... 45,000 Units transferred out ........................................ 42,000 Work in process, 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.

1. Compute the equivalent units for the month for the first department.

2. Determine the costs per equivalent unit for the month.