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., 9,000 units, 3/5 completed 14,670 31 Direct materials, 162,000 units 210,600 225,270 31 Direct labor 62,000 287,270 31 Factory overhead 34,876 322,146 31 Goods finished, 164,100 units 311,520 10,626 31 Bal. ? units, 2/5 completed 10,626 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?

Solutions

Expert Solution

Equivalent Units
Whole Units Direct Materials Conversion
Inventory in process, March 1 9000 0 3600
Started and completed in March 155100 155100 155100
Transferred to Finished goods in March 164100 155100 158700
Inventory in process, March 31 6900 6900 2760
Total units to be assigned costs 171000 162000 161460
Cost Information
Costs per equivalent unit:
Direct Materials Conversion
Total costs for March in Baking Department 210600 96876
Total equivalent units 162000 161460
Cost per equivalent unit 1.30 0.60
Costs charged to production:
Direct Materials Conversion Total
Inventory in process, March 1 14670
Costs incurred in March 307476
Total costs accounted for by the Baking Department 322146
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance 14670
To complete inventory in process, March 1 0 2160 2160
Cost of completed March 1 work in process 16830
Started and completed in March 201630 93060 294690
Transferred to Finished goods in March 311520
Inventory in process, March 31 8970 1656 10626
Total costs assigned by the Baking Department 322146
1. Direct materials cost per equivalent unit $1.30
2. Conversion cost per equivalent unit $0.60
3. Cost of beginning work in process completed during March $16830
4. Cost of units started and completed during March $294690
5. Cost of the ending work in process $10626
b
Conversion cost per equivalent unit prior period = (14670-9000*1.30)/(9000*3/5)= $0.55
Conversion cost per equivalent unit increase

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