Wednesday, 3 October 2012

Kalox, Inc., manufactures an antacid product that passes through two departments. Data for May for the first department follow:

Kalox, Inc., manufactures an antacid product that passes through two departments. Data for May for the first department follow:          
Gallons Materials Labor Overhead
  Work in process, May 1 87,000       $ 84,400     $ 42,200    $ 55,900   
  Gallons started in process 829,000      
  Gallons transferred out 850,000      
  Work in process, May 31 66,000      
  Cost added during May $ 1,116,480     $ 521,025    $ 689,290   

     
The beginning work in process inventory was 70% complete with respect to materials and 55% complete with respect to labor and overhead. The ending work in process inventory was 50% complete with respect to materials and 25% 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 May’s activity for the first department.
   
  Materials   Labor  Overhead
  Equivalent units of production      

   
2. Determine the costs per equivalent unit for May. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
     
Materials     Labor      Overhead
  Cost per equivalent unit $         $        $      



Explanation: