Question

In: Accounting

Costs per Equivalent Unit The following information concerns production in the Baking Department for March. All...

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., 5,700 units, 2/3 completed 11,590
31 Direct materials, 102,600 units 164,160 175,750
31 Direct labor 46,440 222,190
31 Factory overhead 26,122 248,312
31 Goods finished, 104,100 units 239,240 9,072
31 Bal. ? units, 4/5 completed 9,072

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?

Solutions

Expert Solution

Equivalent Units
Whole Units Direct Materials Conversion
Inventory in process, March 1 5700 0 1900
Started and completed in March 98400 98400 98400
Transferred to Finished goods in March 104100 98400 100300
Inventory in process, March 31 4200 4200 3360
Total units to be assigned costs 108300 102600 103660
Cost Information
Costs per equivalent unit:
Direct Materials Conversion
Total costs for March in Baking Department 164160 72562
Total equivalent units 102600 103660
Cost per equivalent unit 1.60 0.70
Costs charged to production:
Direct Materials Conversion Total
Inventory in process, March 1 11590
Costs incurred in March 236722
Total costs accounted for by the Baking Department 248312
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance 11590
To complete inventory in process, March 1 0 1330 1330
Cost of completed March 1 work in process 12920
Started and completed in March 157440 68880 226320
Transferred to Finished goods in March 239240
Inventory in process, March 31 6720 2352 9072
Total costs assigned by the Baking Department 248312
1. Direct materials cost per equivalent unit $1.60
2. Conversion cost per equivalent unit $0.70
3. Cost of beginning work in process completed during March $12920
4. Cost of units started and completed during March $226320
5. Cost of the ending work in process $9072
b
Conversion cost per equivalent unit prior period = (11590-5700*1.60)/(5700*2/3)= $0.65
Conversion cost per equivalent unit increase

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