Question

The charges to Work in Process—Baking Department for a period as well as information concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production. Work in Process—Baking Department Bal., 2,000 units, 70% completed 3,280 To Finished Goods, 14,400 units ? Direct materials, 14,600 units 34,894 Direct labor 16,551 Factory overhead 8,527 Bal., 2,200 units, 30% completed ? If required, round cost per equivalent unit answer to two decimal places. a. Determine the number of whole units to be accounted for and to be assigned costs. units b. Determine the number of equivalent units of production. units c. Determine the cost per equivalent unit. $ per equivalent unit d. Determine the cost of the units transferred to Finished Goods. $ e. Determine the cost of units in ending Work in Process. $

Answer 1

Solution a:

number of whole units to be accounted for = unit in opening WIP + Unit started = 2000 + 14600 = 16600 units

Note: As breakup of beginning WIP is not given for material and conversion, therefore it is not possible solve this question using weighted average method. I have applied FIFO method for solution.

Soluiton b:

Baking department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	2000
Units started this period	14600
Total unit to be accounted for	16600
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 30%	2000	0	600
Started and completed currently	12400	12400	12400
Units in ending WIP Material - 100% Conversion - 30%	2200	2200	660
Total units accounted for	16600	14600	13660

Solution c:

Baking department
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$59,972.00	$34,894.00	$25,078.00
Equivalent units		14600	13660
Cost per equivalent unit		$2.39	$1.8359

Solution d & e:

Baking department
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$3,280
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (600 * $1.8359)	$1,102		$1,102
Total Cost from beginning inventory	$4,382
Current cost of unit started and completed:
Material (12400*$2.39)	$29,636	$29,636
Conversion (12400*$1.8359)	$22,765		$22,765
Total cost of unit started and completed	$52,401
Total cost of unit transferred out	$56,782
Cost assigned to ending WIP:
Material (2200*$2.39)	$5,258	$5,258
Conversion (660*$1.8359)	$1,212		$1,212
Total ending WIP inventory	$6,470
Total cost accounted for	$63,252