Question

Costs per Equivalent Unit 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, 2/3 completed 10,780 31 Direct materials, 75,600 units 151,200 161,980 31 Direct labor 43,210 205,190 31 Factory overhead 24,308 229,498 31 Goods finished, 76,500 units 221,710 7,788 31 Bal. ? units, 2/5 completed 7,788 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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units					4,200
Add: Units Started in Process					75,600
Total Units to account for:					79,800
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP					4,200
Units started and completed					72,300
Ending Work in Process					3,300
Total Units to be accounted for:					79,800
Equivalent Units:
			UNITS	Material Cost		Conversion
				% Completion	Units	% Completion	Units
Units complted from beginning WIP			4200	0%	0	33%	1,400
Units started and completed			72300	100%	72,300	100%	72,300
Ending Work in Process			3300	100%	3,300	40%	1,320
Total Equivalent units					75,600		75,020
TOTAL COST TO ACCOUNT FOR:
				Material		Conversion
Cost Added during May				151,200		67,518
Total Cost to account for:				151,200		67,518
Equivalent Units				75,600		75,020
Cost per Equivalent unit				2		0.9
TOTAL COST ACCOUNTED FOR:
Units completed from Beginning WIP (4200 units)
				Equivalent unit	Cost per EU	Total Cost
Beginning Cost						10780
Material				0	2	0
Conversion Cost				1,400	0.9	1260
Cost of units completed from beginning WIP						12040
Units started and completed (72300 units)
				Equivalent unit	Cost per EU	Total Cost
Material				72,300	2	144600
Conversion Cost				72,300	0.9	65070
Cost of units started and completed						209670
Ending Work in process (3300 units)
				Equivalent unit	Cost per EU	Total Cost
Material				3,300	2	6600
Conversison Cost				1,320	0.9	1188
Total cost of Ending Work in process:						7,788
Total cost of Beginning WIP					10780
Less: Material cost (4200*2)					8400
Conversion cost					2380
Divide: Equiv alent units of Conversion (4200*67%)					2800
Cost per equivalent unit off converrsion					0.85
Conversion cost per EUP has increased in current year