Question

In: Accounting

Costs per Equivalent Unit The following information concerns production in the Baking Department for March. All...

Costs per Equivalent Unit

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, 4/5 completed 12,654
31 Direct materials, 102,600 units 174,420 187,074
31 Direct labor 45,350 232,424
31 Factory overhead 25,504 257,928
31 Goods finished, 104,100 units 249,612 8,316
31 Bal. ? units, 2/5 completed 8,316

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

Equivalent Units
Whole Units Direct Materials Conversion
Inventory in process, March 1 5700 0 1140
Started and completed in March 98400 98400 98400
Transferred to Packing Department in March 104100 98400 99540
Inventory in process, March 31 4200 4200 1680
Total units to be assigned costs 108300 102600 101220
Cost Information
Costs per equivalent unit:
Direct Materials Conversion
Total costs for March in Baking Department 174420 70854
Total equivalent units 102600 101220
Cost per equivalent unit 1.7 0.7
Costs charged to production:
Direct Materials Conversion Total
Inventory in process, March 1 12654
Costs incurred in March 245274
Total costs accounted for by the Baking Department 257928
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance 12654
To complete inventory in process, March 1 0 798 798
Cost of completed March 1 work in process 13452
Started and completed in March 167280 68880 236160
Transferred to Packing Department in March 249612
Inventory in process, March 31 7140 1176 8316
Total costs assigned by the Baking Department 257928
a
1. Direct materials cost per equivalent unit. = $1.7
2. Conversion cost per equivalent unit = $0.7
3. Cost of the beginning work in process completed during March = $13452
4. Cost of units started and completed during March. = $236160
5. Cost of the ending work in process = $8316
b
Increase by $0.05

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