ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Mar. 1...

ACCOUNT Work in Process—Baking Department					ACCOUNT NO.
Date		Item	Debit	Credit	Balance
Date		Item	Debit	Credit	Debit	Credit
Mar.	1	Bal., 4,800 units, 2/5 completed			11,232
	31	Direct materials, 86,400 units	172,800		184,032
	31	Direct labor	50,600		234,632
	31	Factory overhead	28,456		263,088
	31	Goods finished, 87,600 units		253,944	9,144
	31	Bal. ? units, 3/5 completed			9,144

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

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

FIFO method
Beggining units	4800	Transferred out	87,600
Started into production	86400	Ending units	3,600
	91200		91200

Equivalent units	Material	Conversion
Beginning units	4800	4800
Completion in current period	0%	60%
A	0	2880

Units started and completed	82800	82800
Completion	100%	100%
B	82800	82800

Ending Units	3,600	3,600
Completion	100%	60%
C	3600	2160
Total units A+B+C	86400	87840

Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	172800	86400	2.00
Conversion cost	79056	87840	0.90
Total	251856		2.90

Cost of goods sold	Material	convertion cost

Beginning work in progress A			11232
Beginning inventory completed
Completion	0%	60%
Per unit cost	2.00	0.90
Units	4800	4800
Total cost B	0	2592	2592

Units started and completed
Completion	100%	100%
Per unit cost	2.00	0.90
Units	82800	82800
Total cost C	165600	74520	240120

Total cost A+B+C	165600	77112	253944
Ending work in progress
Completion	100%	60%
Per unit cost	2.00	0.90
Units	3,600	3,600
Total cost	7200	1944	9144
	Total cost accounted for		263088

material at beginning = 4800 * 2 = 9600

Total cost - material = Conversion cost

11232-9600 = 1632 for conversion cost

Conversion cost per unit = 1632/4800*40% = 0.85

So conversion cost per equivalent unit increase from .85 to .90

ekkarill92 answered 1 year ago

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