Question

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., 5,100 units, 2/5 completed					7,752
	31	Direct materials, 91,800 units	119,340				127,092
	31	Direct labor	35,830				162,922
	31	Factory overhead	20,150				183,072
	31	Goods finished, 93,000 units			176,598		6,474
	31	Bal. ? units, 3/5 completed					6,474

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

• Requirement [a] ALL 5 parts answered with workings

1	$                    1.30
2	$                    0.60
3	9,588.00
4	167,010.00
5	$            6,474.00

• Workings

[1] and [2]

EUP - FIFO Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units of ENDING WIP	3,900	100.0%	3,900	60.0%	2,340
Units STARTED & COMPLETED	87,900	100%	87,900	100%	87,900
Units of beginning WIP	5,100	0.00%	-	60%	3,060
Equivalent Units of Production			91,800		93,300
COST per EUP			Material		Conversion
Cost incurred this period			$       119,340.00		$                    55,980.00
Total Costs		Costs	$       119,340.00	Costs	$                    55,980.00
Equivalent units of production		EUP	91,800	EUP	93,300
Cost per EUP			$                1.3000		$                          0.6000

--[3] and [4]

Cost Transferred out:	EUP	Cost per EUP	Total Cost
Cost of Beginning WIP			7,752.00
Cost to complete beginning WIP-
- Direct Materials	-	1.30	-
- Conversion	3,060.00	0.60	1,836.00
Total cost to complete beginning WIP			9,588.00
Cost of Units started & completed this period:	EUP	Cost per EUP	Total Cost
- Direct Materials	87,900.00	1.30	114,270.00
- Conversion	87,900.00	0.60	52,740.00
Total costs started & Completed this period			167,010.00
Total cost of work finished this period				176,598.00

--[5]

Costs of Ending WIP:	EUP	Cost per EUP	Total Cost
- Direct Materials	3,900	$                              1.30	$            5,070.00
- Conversion	2,340	$                              0.60	$            1,404.00
Total cost of ending WIP				$                 6,474.00