Question

Equivalent Units of Production and Related Costs

The charges to Work in Process—Baking Department for a period as well as information concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production.

Work in Process—Baking Department
Bal., 3,300 units, 70% completed	4,884	To Finished Goods, 23,700 units	?
Direct materials, 24,100 units	52,297
Direct labor	24,484
Factory overhead	12,613
Bal., 3,700 units, 30% completed	?

If required, round cost per equivalent unit answer to two decimal places.

a. Determine the number of whole units to be accounted for and to be assigned costs.
units

b. Determine the number of equivalent units of production.
units

c. Determine the cost per equivalent unit.
$ per equivalent unit

d. Determine the cost of the units transferred to Finished Goods.
$

e. Determine the cost of units in ending Work in Process.
$

Answer 1

a.	Number of whole units	=	Beginning work in process balance units + Direct material units added
		=	3,300 + 24,100	Units
		=	27,400	Units
b.	Number of Equivalent units of production	=	Units transferred to finished goods + Ending work in process balance units (completed)
		=	23,700 + (3,700 X 30%)	Units
		=	24,810	Units
c.	Cost per equivalent unit	=	Total production cost / Equivalent units of production
		=	($4,884 + $52,297 + $24,484 + $12,613) / 24,810
		=	$         3.80
d.	Cost of units transferred to Finished goods	=	Units transferred to finished goods X Cost per equivalent unit
		=	23,700 X $3.80
		=	$    90,060
e.	Cost of units in ending work in process	=	Ending work in process balance units (completed) X Cost per equivalent unit
		=	(3,700 X 30%) X $3.80
		=	$       4,218