Exercise 5-9 (Algo) Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method [LO5-2, LO5-3] Pureform, Incorporated, uses the weighted-average method in its process costing system. It 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 Units 70,000 669,000 690,000 49,000 1. Equivalent units of production 2. Cost per equivalent unit Materials Materials $ 61,100 $ 323,805 $ 462,650 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. Labor $ 808,060 Required: 1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month. 2. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month. (Round your answers to 2 decimal places.) Labor $ 26,300 Overhead $ 37,500 Overhead
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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![Exercise 5-9 (Algo) Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method [LO5-2,
LO5-3]
Pureform, Incorporated, uses the weighted-average method in its process costing system. It 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
Units
70,000
669,000
690,000
49,000
1. Equivalent units of production
2. Cost per equivalent unit
Materials
Materials
$ 61,100
$ 323,805
$ 462,650
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 pro inve tory wa 70% complete with respect to materials and 50% complete with respect to labor
and overhead.
Labor
$ 808,060
Required:
1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.
2. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month. (Round your answers to 2
decimal places.)
Labor
$ 26,300
Overhead
$ 37,500
Overhead](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F91beb223-042b-4276-85d0-ca6eb092308d%2F4ff1c360-73ce-4dcf-bd53-a523d616eb04%2Fokh5xo_processed.jpeg&w=3840&q=75)
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