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., 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?

Answer 1

		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