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., 6,000 units, 2/5 completed					9,720
	31	Direct materials, 108,000 units	151,200				160,920
	31	Direct labor	42,160				203,080
	31	Factory overhead	23,720				226,800
	31	Goods finished, 109,500 units			218,880		7,920
	31	Bal., ? units, 3/5 completed					7,920

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	$

Answer 1

.

1. Direct materials cost per equivalent unit	$ 1.40
2. Conversion cost per equivalent unit	$ 0.60
3. Cost of the beginning work in process completed during December	$ 11,880
4. Cost of units started and completed during December	$ 207,000
5. Cost of the ending work in process	$ 7,920

• Workings

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	4,500	100.0%	4,500	60.0%	2,700
Units STARTED & COMPLETED	103,500	100%	103,500	100%	103,500
Units of beginning WIP	6,000	0.00%	-	60.00%	3,600
Equivalent Units of Production			108,000		109,800
COST per EUP			Material		Conversion
Cost incurred this period			$       151,200.00		$                    65,880.00
Total Costs		Costs	$       151,200.00	Costs	$                    65,880.00
Equivalent units of production		EUP	108,000	EUP	109,800
Cost per EUP			$             1.40000		$                          0.6000

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			$            9,720.00
Cost to complete beginning WIP-
- Direct Materials	-	$                              1.40	$                         -
- Conversion	3,600	$                              0.60	$            2,160.00
Total cost to complete beginning WIP			$          11,880.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	103,500	$                              1.40	$       144,900.00
- Conversion	103,500	$                              0.60	$          62,100.00
Total costs started & Completed this period			$       207,000.00
Total cost of work finished this period				$             218,880.00
Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	4,500	$                              1.40	$            6,300.00
- Conversion	2,700	$                              0.60	$            1,620.00
Total cost of ending WIP				$                 7,920.00
Total costs accounted for				$             226,800.00