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 80,000 $68,600 $30,000 $48,000 Gallons started in process 760,000 Gallons transferred out 790,000 Work in process, May 31 50,000 Cost added during May $907,200 $370,000 $592,000
The beginning work in process inventory was 80% complete with respect to materials and 75% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 20% complete with respect to labor and overhead.
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.
2. Determine the costs per equivalent unit for May.