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
March	1	Bal., 7,200 units, 3/5 completed					21,600
	31	Direct materials, 129,600 units	194,400				216,000
	31	Direct labor	58,380				274,380
	31	Factory overhead	32,844				307,224
	31	Goods finished, 131,400 units			296,856		10,368
	31	Bal. ? units, 3/5 completed					10,368

a. Determine the number of units in work in process inventory at March 31.
_______ units

b. Determine the equivalent units of production for direct materials and conversion costs in March. If an amount is zero, enter in "0".

Baking Department
Equivalent Units of Production for Direct Materials and Conversion Costs
For March
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, March 1
Started and completed in March
Transferred to finished goods in March
Inventory in process, March 31
Total

Answer 1

Requirement a:

The number of units in work in process inventory at March 31 are 5,400 units

Calculations:

	Units
Beginning work-in process inventory	7,200
Started during the March	129,600
Total units accounted for	136,800
Units finished	-131,400
Ending work-in-process inventory	5,400

Requirement b:

	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, March 1	7,200	0	2,880
Started and completed in March	124,200	124,200	124,200
Transferred to finished goods in March	131,400	124,200	127,080
Inventory in process, March 31	5,400	5,400	3,240
Total	136,800	129,600	130,320

Calculations:

i. Units started and completed in March = Units started during March - Ending work-in process inventory

= 129,600 - 5,400

= 124,200

ii.

	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, March 1	7,200
[7,200 x 0%]		0
[7,200 x 2/5]			2,880
Started and completed in March	124,200	124,200	124,200
Transferred to finished goods in March	131,400	124,200	127,080
Inventory in process, March 31	5,400
[5,400 x 100%]		5,400
[5,400 x 3/5]			3,240
Total	136,800	129,600	130,320

Materials are added beginning of the process. So, direct materials 0% to be completed from beginning work in process inventory and 100% completed from ending work-in process inventory.

Beginning work-in process inventory 3/5 has been completed. So, 2/5 to be completed. Hence, 2/5 is used to get equivalent units for conversion costs in Inventory in process, March 1.