Question

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., 5,100 units, 3/5 completed					11,985
	31	Direct materials, 91,800 units	174,420				186,405
	31	Direct labor	47,650				234,055
	31	Factory overhead	26,798				260,853
	31	Goods finished, 93,000 units			250,947		9,906
	31	Bal. ? units, 4/5 completed					9,906

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?
Increase

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				5,100
Add: Units Started in Process				91,800
Total Units to account for:				96,900
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				5100
Units started and completed				87,900
Ending Work in Process				3,900
Total Units to be accounted for:				96,900
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	40%	2,040
Units started and completed			100%	87,900	100%	87,900
Ending Work in Process			100%	3,900	80%	3,120
Total Equivalent units				91,800		93,060
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			174,420		74,448
Equivalent Units			91,800		93,060
Cost per Equivalent unit			1.9		0.8
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (5100 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					11985
Material			0	1.9	0
Conversion Cost			2,040	0.8	1632
Cost of units completed from Beg WIP					13617
Units started and Transferred out (87900 units)
			Equivalent unit	Cost per EU	Total Cost
Material			87,900	1.9	167010
Conversion Cost			87,900	0.8	70320
Total Cost of Units completed and transferred out:					237330
Ending Work in process (3,900 units)
			Equivalent unit	Cost per EU	Total Cost
Material			3,900	1.9	7410
Conversison Cost			3,120	0.8	2496
Total cost of Ending Work in process:					9,906
Total Cost of completed units					250,947
Req b:
Total Beginning Cost				11985
Less: Material cost (5100*1.90)				9690
Conversion cost				2295
Divide: Equivalent units of conversion				3060	(5100*60%)
Conversion cost per unit				0.75
The converesion cost has been increased