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., 8,100 units, 4/5 completed					20,250
	31	Direct materials, 145,800 units	277,020				297,270
	31	Direct labor	74,190				371,460
	31	Factory overhead	41,730				413,190
	31	Goods finished, 147,600 units			398,196		14,994
	31	Bal. ? units, 3/5 completed					14,994

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.	$

Answer 1

	Ending units=Beginning units+Units started-Units transferred out=8100+145800-147600=6300 units
	Units started and completed=Units transferred out-Beginning units=147600-8100=139500 units
	Equivalent units:
					Materials			Conversion
					Units	% of completion	Equivalent units	Units	% of completion	Equivalent units
	Beginning WIP				8100	0%	0	8100	20%	1620
									(1-4/5)
	Units started and completed				139500	100%	139500	139500	100%	139500
	Ending WIP				6300	100%	6300	6300	60%	3780
									(3/5)
	Total equivalent units						145800			144900
1	Direct material cost per equivalent unit=Direct material cost/Equivalent units-Materials=277020/145800=$ 1.9
2	Conversion cost per equivalent unit=Cost of direct labor and factory overhead/Equivalent units-convesrion=(74190+41730)/144900=$ 0.8
3	Cost of the beginning WIP completed during march=Cost of beginning WIP+(Equivalent units-Conversion*Conversion cost per equivalent units)=20250+(1620*0.8)=$ 21546
4	Cost of units started and completed=Equivalent units*(Direct material cost per equivalent unit+Conversion cost per equivalent unit)=139500*(1.9+0.8)=$ 376650
5	Cost of the ending work in process=(Equivalent units-Materials*direct material cost per equivalent unit)+(Equivalent unit-Conversion*Conversion cost per equivalent units)=(6300*1.9)+(3780*0.8)=$ 14994