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., 5,400 units, 2/3 completed					9,540
	31	Direct materials, 97,200 units	136,080				145,620
	31	Direct labor	37,690				183,310
	31	Factory overhead	21,206				204,516
	31	Goods finished, 98,400 units			196,620		7,896
	31	Bal. ? units, 4/5 completed					7,896

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

Cost of Production Report-Baking Department
For the Month Ended March 31
Unit Information
Units charged to production:
Inventory in process, March 1			5400
Received from materials storeroom			97200
Total units accounted for by the Baking Department			102600
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	5400	0	1800
Started and completed in March	93000	93000	93000
Transferred to Packing Department in March	98400	93000	94800
Inventory in process, March 31	4200	4200	3360
Total units to be assigned costs	102600	97200	98160
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Baking Department		136080	58896
Total equivalent units		97200	98160
Cost per equivalent unit		1.4	0.6
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			9540
Costs incurred in March			194976
Total costs accounted for by the Baking Department			204516
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			9540
To complete inventory in process, March 1	0	1080	1080
Cost of completed March 1 work in process			10620
Started and completed in March	130200	55800	186000
Transferred to Packing Department in March			196620
Inventory in process, March 31	5880	2016	7896
Total costs assigned by the Baking Department			204516
a
1. Direct materials cost per equivalent unit = $1.4
2. Conversion cost per equivalent unit = $0.6
3. Cost of the beginning work in process completed during March=$10620
4. Cost of units started and completed during March = 186000
5. Cost of the ending work in process = $7896
2
Conversion cost per equivalent unit increase by $0.05