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., 7,800 units, 2/3 completed					17,940
	31	Direct materials, 140,400 units	252,720				270,660
	31	Direct labor	71,370				342,030
	31	Factory overhead	40,150				382,180
	31	Goods finished, 142,200 units			369,460		12,720
	31	Bal. ? units, 2/5 completed					12,720

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

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 = 252720/140400	$           1.80
2. Conversion cost per equivalent unit = 71,370 + 40,150 / 138900	$           0.80
3. Cost of the beginning work in process completed during March
Work in Process—Baking Department balance, August 1	$  17,940.00
Conversion costs incurred during August (2100 equivalent units × $0.80)	$    1,686.05
Cost of beginning work in process completed during August	$  19,626.05
4. Cost of units started and completed during March = [($1.80 + $0.80) × 134,400 units	$349,827.04
5. Cost of the ending work in process
Direct materials ($1.80 × 6,000 units)	$  10,800.00
Conversion costs ($0.32 × 7,800 equivalent units)	$    1,926.91
Cost of ending work in process	$  12,726.91
	Baking Department
	Equivalent Units of Production for Direct Materials and Conversion Costs
	Whole Units	Equivalent Units Direct Materials	Equivalent Units Conversion
Inventory in process, May 1 (7800 x 1/3)	7,800	0	2,100
Started and completed in May	134,400	134,400	134,400
Transferred to finished goods in  May	142,200	134,400	136,500
Inventory in process,May 31 (6000 x 2/5)	6,000	6,000	2,400
Total	148,200	140,400	138,900
a)
Units in process, May 1	7800
Units placed into production for May	140400
Less units finished during May	-142,200
Units in process, May 31	6000