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., 6,300 units, 2/5 completed 11,088 31 Direct materials, 113,400 units 170,100 181,188 31 Direct labor 51,640 232,828 31 Factory overhead 29,042 261,870 31 Goods finished, 114,900 units 252,654 9,216 31 Bal. ? units, 3/5 completed 9,216 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

Answer-a(1):

Direct material cost = $170,100

Direct material cost per equivalent unit = Direct material cost / Total equivalent units

                                                              = $170,100 / 121,560 = $1.40

Answer-a(2):

Total Conversion cost = Direct labour cost + Factory overhead

                          = $51,640 + $29,042 = $80,682

Conversion cost per equivalent unit = Total conversion cost / Total equivalent units

                                                              = $80,682 / 121,560 = $0.66

Answer-a(3):

Calculation of cost of the beginning WIP completed:

Answer-a(4):

Calculation of cost of units started and complted:

Answer-a(5)

Calculation of cost of the ending WIP in process: