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., 18,000 units, 1⁄4 completed					14,760
	31	Direct materials, 336,000 units	252,000				266,760
	31	Direct labor	40,000				306,760
	31	Factory overhead	60,530				367,290
	31	Goods finished, 330,000 units			346,410		20,880
	31	Bal. ? units, 2⁄5 completed					20,880

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

Calculations are shown below: 1 Units to account for: Units accounted for: Units, 18000 336000 Units Units Total units accounted for work in 330000 3 Units started 4 Total units to account for work in D4-D2 B4 B2+B3 6 1& 2 Equivalent Units Direct Materials Conversion Costs 8 Units started and c 9 Units, 10 Units, 11 Equivalent units of output 12 13 eted -330000-18000 |-B8*100% BS* 100% B9 (1-(1/4 work in process work in process B11-B8-B9 B4 B9" ( 1 00%-100%) B10* 100% SUMC8:C10) SUMID8:D10 COST INFORMATIONN 14 15 Costs to account for 16 Be 17 Incurred 18 Total costs to account for 19 Cost Direct Materials Conversion Costs Total work in process 14760 B17+C17 252000 B16+B17 C16+C17 D16+D17 uivalent unit: 20 Current costs 21 Divided by equivalent units 22 Cost 23 24 Costs accounted for: 25 Units transferred out 26Units, be 27 28 B17 -C11 B20/B21 -C17 D11 -C20/C21 uivalent unit work in process: rom D16 From current -(C9 B22 C2 3. Cost of the beginning work in -C27+C28 29 30 4. Units started and completed 31 5. Ending work in process ess completed during March 32 Direct materials Conversion costs -C10 B22 D10 C2 C32+C33 b. If the direct materials cost is the same for February and March, then the conversion cost per equivalent unit will remain the same in March.