Question

7. Equivalent Units of Production

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, 4/5 completed					18,720
	31	Direct materials, 129,600 units	168,480				187,200
	31	Direct labor	49,490				236,690
	31	Factory overhead	27,838				264,528
	31	Goods finished, 131,400 units			255,564		8,964
	31	Bal. ? units, 3/5 completed					8,964

A. 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

Solution

Baking Department
Equivalent units of production for Direct material and conversion cost
For march
	Whole Units	Equivalent units Direct Material	Equivalent units Conversion cost
Inventory in process, March 1	7200	0	1440
Started and completed in march	124200	124200	124200
Transferred to finished goods in march	131400	124200	125640
Inventory in process march 31	5400	5400	3240
Total	136800	129600	128880

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion	Material	Conversion
Beginning WIP	7,200	100%	80%	0%	20%
Units introduced	129,600
Total units to be accounted for	136,800
Completed and Transferred unit	131,400	0%	0%	100%	100%
Ending WIP	5,400	0%	0%	100%	60%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	7,200	0%	-	20%	1,440
From units started/Introduced	124,200	100%	124,200	100%	124,200
Total	131,400		124,200		125,640
	Total Units	Material		Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	5,400	100%	5,400	60%	3,240
Total EUP	136,800		129,600		128,880