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., 5,700 units, 2/5 completed					8,664
	31	Direct materials, 102,600 units	133,380				142,044
	31	Direct labor	40,390				182,434
	31	Factory overhead	22,718				205,152
	31	Goods finished, 104,100 units			197,676		7,476
	31	Bal. ? units, 4/5 completed					7,476

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?
Increase

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				5,700
Add: Units Started in Process				102,600
Total Units to account for:				108,300
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				5700
Units started and completed				98,400
Ending Work in Process				4,200
Total Units to be accounted for:				108,300
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	60%	3,420
Units started and completed			100%	98,400	100%	98,400
Ending Work in Process			100%	4,200	80%	3,360
Total Equivalent units				102,600		105,180
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			133,380		63,108
Equivalent Units			102,600		105,180
Cost per Equivalent unit			1.3		0.6
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (5700 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					8664
Material			0	1.3	0
Conversion Cost			3,420	0.6	2052
Cost of units completed from Beg WIP					10716
Units started and Transferred out (98400 units)
			Equivalent unit	Cost per EU	Total Cost
Material			98,400	1.3	127920
Conversion Cost			98,400	0.6	59040
Total Cost of Units completed and transferred out:					186960
Ending Work in process (4200 units)
			Equivalent unit	Cost per EU	Total Cost
Material			4,200	1.3	5460
Conversion Cost			3,360	0.6	2016
Total cost of Ending Work in process:					7,476
Req A: Material cost per eqiu. Unit: $ 1.30 per unit
Req b: Conversion cost per eq. unit: $ 0.60 pere unit
Req c: Cost of beg. WIP completed: $ 10716
Req d: Cost of units started and completed: $ 186,960
Req e: Cost of ending WIP: $ 7476
Req b:
Cost of Beginning WIP			8664
Less: material cost (5700*1.30)			7410
Conversion cost			1254
Number of Eq. conversion cost units			2280
Conversion cost per unit			0.55
The conversion cost has been INCREASED from last year.