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., 2,600 units, 40% completed	8,918	To Finished Goods, 18,700 units	?
Direct materials, 19,000 units	95,380
Direct labor	49,879
Factory overhead	25,695
Bal., 2,900 units, 60% 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

a.

Whole units to be accounted:

Units in beginning work in process	2,600
Add: Unit started during the period	19,000
Total whole units	21,600

Whole units to be assigned cost:

Units transferred to finished goods	18,700
Add: Units in ending inventory work in process	2,900
Total whole units	21,600

b.

Equivalent units of production:

Units transferred to finished goods	18,700
Add: Equivalent units in ending inventory in process (2,900 units x 0.6)	1,740
Total equivalent units	20,440

c.

Cost per equivalent unit = Total production cost/ Total equivalent units

Computation of total production cost:

Beginning inventory	$          8,918
Add: Direct material	$        95,380
Add: Direct labor	$        49,879
Add: Factory overhead	$        25,695
Total cost	$     179,872

Cost per equivalent unit = $ 179,872/20,440 = $ 8.80

d.

Cost of the units transferred to Finished Goods

= No. units transferred to finished goods x Cost per equivalent unit

= 18,700 x $ 8.8 = $ 164,560

e.

Cost of units in ending work in process

= No. equivalent units in ending work in process x Cost per equivalent unit

= 1,740 x $ 8.8 = $ 15,312