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., 5,400 units, 4/5 completed					10,908
	31	Direct materials, 97,200 units	145,800				156,708
	31	Direct labor	43,650				200,358
	31	Factory overhead	24,558				224,916
	31	Goods finished, 98,400 units			216,264		8,652
	31	Bal. ? units, 4/5 completed					8,652

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

Ques 1
	Whole units	DM	Conversion costs
Inventory in process August 1	5400	0	1080
Started and completed	93000	93000	93000
transferred to FG	98400	93000	94080
Inventory in process August 31	4200	4200	3360
total	102600	97200	97440
a.
Dirct materials cost per equivalent unit
cost	145,800
equivalent units	97200
Cost per unit	$                1.50
b.
Conversion cost per equivalent unit
cost	68,208
equivalent units	97440
Cost per unit	$                0.70
c
Work in process	10,908
Conversion ocsts in july	$           756.00
1080*0.7
cost of the beginning work in process completed	$     11,664.00
d
cost of units started during august
(1.5+0.7)*93000	204600
e
Ending Wip	cot per unit	units	cost
DM	$                1.50	4200	6300
Conversion cost	$                0.70	3360	2352
total cost of endinf WIP			8652
Ques 2
this has been increase
explanation above