Preform, Inc., manufactures a product that passes through two departments. Data
ID: 2420574 • Letter: P
Question
Preform, Inc., manufactures a product that passes through two departments. Data for a recent month for the first department follow: No need to Transcribe Only table found 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 10% 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. Determine the costs per equivalent unit for the month. (Round your answers to 2 decimal places.)Explanation / Answer
Answer
Answer 1
Statement of equivalent production units for first department ( Weighted Average method)
Materials
Labor
Overhead
Input Units
Particulars
Output Units
%
Units
%
Units
%
Units
Opening work in Process
76000
Unit completed and transferred to second Department
740000
100%
740000
100%
740000
100%
740000
Input
719000
Total
795000
Closing work in process
55000
70%
38500
10%
5500
10%
5500
Total units
795000
778500
745500
745500
Answer 2
Statement of cost per equivalent unit
Figures in $
Particulars
Cost in beginning inventory
Cost added during the month
Total Cost
Equivalent units
Cost per unit
A
B
C
D
A+B
C/D
Material
68400
904725
973125
778500
1.25
Labor
30200
372370
402570
745500
0.54
Overhead
41900
517225
559125
745500
0.75
Total cost per unit
2.54
Statement of equivalent production units for first department ( Weighted Average method)
Materials
Labor
Overhead
Input Units
Particulars
Output Units
%
Units
%
Units
%
Units
Opening work in Process
76000
Unit completed and transferred to second Department
740000
100%
740000
100%
740000
100%
740000
Input
719000
Total
795000
Closing work in process
55000
70%
38500
10%
5500
10%
5500
Total units
795000
778500
745500
745500