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., 32,800 units, 1⁄4 completed					29,520
	31	Direct materials, 604,000 units	483,200				512,720
	31	Direct labor	110,180				622,900
	31	Factory overhead	165,022				787,922
	31	Goods finished, 594,200 units			742,340		45,582
	31	Bal. ? units, 3⁄5 completed					45,582

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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units			32,800
Add: Units Started in Process			6,04,000
Total Units to account for:			6,36,800
UNITS TO BE ACCOUNTED FOR:
Units completed from beginning WIP		32800
Units started and completed			5,61,400
Ending Work in Process			42,600
Total Units to be accounted for:		6,36,800
Equivalent Units:
			UNITS	Material Cost	Conversion
				% Completion	Units	% Completion	Units
Units completed from Beg.	32800	0%	0	75%	24,600
Units started and completed	561400	100%	5,61,400	100%	5,61,400
Ending Work in Process	42600	100%	42,600	60%	25,560
Total Equivalent units	636800		6,04,000		6,11,560
TOTAL COST TO ACCOUNT FOR:
				Material		Conversion
Cost Added during May		4,83,200		2,75,202
Total Cost to account for:		4,83,200		2,75,202
Equivalent Units			6,04,000		6,11,560
Cost per Equivalent unit		0.8		0.45
TOTAL COST ACCOUNTED FOR:
Units completed from Beg. Wip (32800 units)
				Equivalent unit	Cost per EU	Total Cost
Cost of beginning WIP				29520
Material				0	0.8	0
Conversion Cost			24,600	0.45	11070
Total cost to complete beginning WIP			40590
Units started and completed (561400 units)
				Equivalent unit	Cost per EU	Total Cost
Material				5,61,400	0.8	449120
Conversion Cost			5,61,400	0.45	252630
Total cost of units started and complted			701750
Total cost of units transferred out			742340
Ending Work in process (42600 units)
				Equivalent unit	Cost per EU	Total Cost
Material				42,600	0.8	34080
Conversison Cost			25,560	0.45	11502
Total cost of Ending Work in process:			45,582
Final Answer:
1. Material cost per EUP			0.8
2. Conversion cost per EUP			0.45
3. Cost of Beginning WIP completed during March	11070
4. Cost of units started and completed		701750
5. Cost of ending WIP:			45582
Req b.
Cost of beginning WIP			29520
Less: Material cost (32800*0.8)			26240
Conversion cost				3280
Divide: Equivalent units of conversion (32800*25%)	8200
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