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:

1.

	Materials	Labor	Overhead
Units transferred to the next department	850,000	850,000	850,000
Work in process, ending:
Materials: 66,000 units × 50% complete	33,000
Labor and overhead: 66,000 units × 25% complete		16,500	16,500
Equivalent units of production	883,000	866,500	866,500

2.

	Materials		Labor		Overhead
Cost of beginning work in process	$	84,400	$	42,200	$	55,900
Costs added during the period		1,116,480		521,025		689,290
Total cost (a)	$	1,200,880	$	563,225	$	745,190
Equivalent units of production (b)		883,000		866,500		866,500
Cost per equivalent unit (a) ÷ (b)	$	1.36	$	0.65	$	0.86