Question

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 $ b. Assuming that the direct materials cost is the same for November and December, did the conversion cost per equivalent unit increase, decrease, or remain the same in December? Increase

Answer 1

		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, December 1	24000	0	6000
Started and completed in December	104000	104000	104000
Transferred to Finished goods in December	128000	104000	110000
Inventory in process, December 31	30000	30000	15000
Total units to be assigned costs	158000	134000	125000
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for December in Baking Department		234500	525000
Total equivalent units		134000	125000
Cost per equivalent unit		1.75	4.20
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			116700
Costs incurred in December			759500
Total costs accounted for by the Baking Department			876200
Cost allocated to completed and partially completed units:
Inventory in process, December 1 balance			116700
To complete inventory in process, December 1	0	25200	25200
Cost of completed December 1 work in process			141900
Started and completed in December	182000	436800	618800
Transferred to Finished goods in December			760700
Inventory in process, December 31	52500	63000	115500
Total costs assigned by the Baking Department			876200
1. Direct materials cost per equivalent unit $1.75
2. Conversion cost per equivalent unit $4.20
3. Cost of beginning work in process completed during December $141900
4. Cost of units started and completed during December $618800
5. Cost of the ending work in process $115500
b
Conversion cost per equivalent unit prior period = (116700-24000*1.75)/(24000*3/4)= $4.15
Conversion cost per equivalent unit increase