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., 7,800 units, 2/5 completed					17,160
	31	Direct materials, 140,400 units	266,760				283,920
	31	Direct labor	72,440				356,360
	31	Factory overhead	40,744				397,104
	31	Goods finished, 142,200 units			383,784		13,320
	31	Bal. ? units, 2/5 completed					13,320

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

Beggining units	7800	Transferred out	1,42,200
Started into production	140400	Ending units	6,000
	148200		148200
Equivalent units	Material	Conversion
Beginning units	7800	7800
Completion in current period	0%	60%
A	0	4680
Units started and completed	134400	134400
Completion	100%	100%
B	134400	134400
Ending Units	6,000	6,000
Completion	100%	40%
C	6000	2400
Total units A+B+C	140400	141480
Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	266760	140400	1.90
Conversion cost	113184	141480	0.80
Total	379944		2.70

Cost of goods sold	Material	convertion cost
Beginning work in progress A	14820	2340	17160
Beginning inventory completed
Completion	0%	60%
Per unit cost	1.90	0.80
Units	7800	7800
Total cost   B	0	3744	3744
Units started and completed
Completion	100%	100%
Per unit cost	1.90	0.80
Units	134400	134400
Total cost    C	255360	107520	362880
Total cost A+B+C	270180	111264	383784
Ending work in progress
Completion	100%	40%
Per unit cost	1.90	0.80
Units	6,000	6,000
Total cost	11400	1920	13320

Cost per equivalent unit	Material	Conversion cost
For current period	1.90	0.80
For beginning inventory	1.9	0.75
increase (decrease)	0.00	0.05