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In: Accounting

Costs per Equivalent Unit The following information concerns production in the Baking Department for December. All...

Costs per Equivalent Unit

The following information concerns production in the Baking Department for December. 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

Dec. 1 Bal., 24,000 units, 3⁄4 completed 116,700  

31 Direct materials, 134,000 units 234,500    351,200

31 Direct labor 150,000 501,200

31 Factory overhead 375,000    876,200

31 Goods finished, 128,000 units    760,700 115,500

31 Bal., ? units, 1⁄2 completed 115,500

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 December $ _____

4. Cost of units started and completed during December $ _____

5. Cost of the ending work in process $ _____

Solutions

Expert Solution

1& 2)Units in ending inventory =Beginning +started -completed and transferred out

        = 24000 + 134000 - 128000

      = 30000 units

Under FIFO ,units acquired /started first are transferred out first .so of the units completed and transferred out ,24000 is from beginning WIP and rest is those started and completed during the period = 128000-24000= 104000 units

Material Conversion
Beginning work in process 0 24000*[1-3/4completed]= 6000
Started and completed 104000 104000
Ending WIP 30000*100%=30000 30000*1/2=15000
Equivalent unit 134000 125000
Material conversion
Cost incurred duing the peiod 234500 150000+375000=525000
Equivalent unit 134000 125000
cost per equivalent unit 234500/134000=$ 1.75 $ 4.2

Direct materials cost per equivalent unit = $ 1.75

Conversion cost per equivalent unit = $ 4.2

3)

equivalent unit *cost per equivalent unit Total
Material 0*1.75 =0
Conversion 6000*4.2= 25200
Cost of the beginning work in process completed during December 25200

4)

equivalent unit *cost per equivalent unit Total
Material 104000*1.75 =182000
Conversion 104000*4.2= 436800
Cost of units started and completed during December 618800

5)

equivalent unit *cost per equivalent unit Total
Material 30000*1.75 =52500
Conversion 15000*4.2= 63000
Cost of the ending work in process completed during December 115500

ekkarill92 answered 2 years ago
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