Question

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The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

ACCOUNT Work in Process—Baking Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 4,200 units, 4/5 completed					10,080
	31	Direct materials, 75,600 units	136,080				146,160
	31	Direct labor	38,800				184,960
	31	Factory overhead	21,824				206,784
	31	Goods finished, 76,500 units			198,732		8,052
	31	Bal. ? units, 4/5 completed					8,052

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

1. Direct materials cost per equivalent unit.	$
2. Conversion cost per equivalent unit.	$
3. Cost of the beginning work in process completed during March.	$
4. Cost of units started and completed during March.	$
5. Cost of the ending work in process.	$

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

Answer 1

Production report of Baking Deptt. For March:
a)Require-
ments:		Phy units	DM Costs	Conv. Costs	Total
	Op. WIP	4200	0	840
	Started and completed	72300	72300	72300
	Transferred out	76500
	Cl. WIP	3300	3300	2640
	Equivalent units		75600	75780
	Cost incurred during March		136080	60624
1 & 2	Cost per Equivalent unit		1.8	0.80
	Cost of Beg WIP:
	Op WIP Cost				10080
	Incurred in March to complete			672	672
3	Total Cost of Op. WIP				10752
4	Cost of units Started and Completed		130140	57840	187980
5	Cost of ending WIP		5940	2112	8052
b) The conversion cost per equivalent unit going to remain the
same in March because the Direct Material cost are applied in
the beginning and conversion costs are equally distributed during
the period.