Question

In: Accounting

The following information concerns production in the Baking Department for March. All direct materials are placed...

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., 4,500 units, 4/5 completed 9,540
31 Direct materials, 81,000 units 129,600 139,140
31 Direct labor 36,400 175,540
31 Factory overhead 20,468 196,008
31 Goods finished, 82,200 units 188,880 7,128
31 Bal. ? units, 4/5 completed 7,128

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. $

Solutions

Expert Solution

  • All answers are based on following step wise calculation, please go through with following steps:

STEP 1

Reconciliation of Units

Units

% already completed

% completed this period

Material

Conversion cost

Material

Conversion cost

Beginning WIP

                     4,500

100%

80%

0%

20%

Units introduced

                   81,000

Total units to be accounted for

                   85,500

Completed and Transferred unit

                   82,200

0%

0%

100%

100%

Ending WIP

                     3,300

0%

0%

100%

80%

STEP 2

Equivalent Units

Total Units

Materials

Conversion Cost

Units Transferred:

% completed this period

Equivalent Units

% completed this period

Equivalent Units

From WIP

                     4,500

0%

                      -  

20%

                     900

From units started

                   77,700

100%

             77,700

100%

               77,700

Total

                   82,200

             77,700

               78,600

Total Units

Materials

Conversion Cost

Ending WIP

3300

% completed this period

Equivalent Units

% completed this period

Equivalent Units

Total

                     3,300

100%

               3,300

80%

                  2,640

Total EUP

                   85,500

             81,000

               81,240

STEP 3

Cost per Equivalent Units AND Cost to be accounted for

Materials

Conversion Cost

TOTAL

Cost incurred in Current Period

$                                     129,600.00

$                                 56,868.00

$    186,468.00

Total Equivalent Units

                                          81,000.00

                                    81,240.00

Cost per Equivalent Units

$                                                  1.60

$                                            0.70

Cost of Beginning WIP

$                                        9,540.00

$                                                -  

$        9,540.00

Total cost to be accounted for

$    196,008.00

STEP 4

Cost report [Including Reconciliation]

Cost of

Units Transferred

        82,200.00

units

Equivalent Units [Step 2]

Cost per Equivalent Units [Step 3]

Cost of Units Transferred

TOTAL

A

Materials

             77,700

$              1.60

$ 124,320.00

B

Conversion Costs

             78,600

$              0.70

$    55,020.00

C=A+B

Total

$ 179,340.00

D

Cost of Beginning WIP

$       9,540.00

E=C+D

Total Cost of Units transferred

$    188,880.00

Cost of

Ending WIP

          3,300.00

units

Equivalent Units [Step 2]

Cost per Equivalent Units [Step 3]

Cost of Ending WIP

TOTAL

F

Materials

                3,300

$              1.60

$       5,280.00

G

Conversion Costs

          2,640.00

$              0.70

$       1,848.00

H = F + G

Total Cost of Ending WIP

$        7,128.00

I = E + H

Total Cost accounted for

$    196,008.00

  • On the basis of above workings, following answer are provided:

>Direct material cost per Equivalent Unit = $ 1.60 [Step 3]

>Conversion cost per Equivalent Unit = $ 0.70 [Step 3]

>Cost of Beginning WIP completed during March = 900 Equivalent Units for Conversion cost x $ 0.70 = $ 630 [Step 2 and 3]

>Cost of Units started and completed = 77,700 equivalent units x $(1.6 + 0.7) = 77700 x 2.3 = $ 178,710 [Step 2 and 3]

>Cost of Ending WIP = $ 7,128 [Step 4]


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