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., 9,300 units, 3/5 completed					20,925
	31	Direct materials, 167,400 units	301,320				322,245
	31	Direct labor	85,400				407,645
	31	Factory overhead	48,040				455,685
	31	Goods finished, 169,500 units			440,421		15,264
	31	Bal. ? units, 2/5 completed					15,264

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

		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	9300	0	3720
Started and completed in March	160200	160200	160200
Transferred to Finished goods in March	169500	160200	163920
Inventory in process, March 31	7200	7200	2880
Total units to be assigned costs	176700	167400	166800
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Baking Department		301320	133440
Total equivalent units		167400	166800
Cost per equivalent unit		1.80	0.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			20925
Costs incurred in March			434760
Total costs accounted for by the Baking Department			455685
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			20925
To complete inventory in process, March 1	0	2976	2976
Cost of completed March 1 work in process			23901
Started and completed in March	288360	128160	416520
Transferred to Finished goods in March			440421
Inventory in process, March 31	12960	2304	15264
Total costs assigned by the Baking Department			455685
1. Direct materials cost per equivalent unit $1.80
2. Conversion cost per equivalent unit $0.80
3. Cost of beginning work in process completed during March $23901
4. Cost of units started and completed during March $416520
5. Cost of the ending work in process $15264
b
Conversion cost per equivalent unit prior period = (20925-9300*1.80)/(9300*3/5)= $0.75
Conversion cost per equivalent unit increase