Question

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. Balance Date Item Debit Credit Debit Credit March 1 Bal., 9,000 units, 4/5 completed 31 Direct materials, 162,000 units 243,000 27,000 270,000 342,150 382,728 31 Direct labor 72,150 40,578 31 Factory overhead 31 Goods finished, 164,100 units 369,480 13,248 13,248 31 Bal. ? units, 3/5 completed a. Determine the number of units in work in process inventory at March 31. units b. Determine the equivalent units of production for direct materials and conversion costs in March. If an amount is zero, enter in "0".

Answer 1

Answer

• Requirement [a]
  No. of units in WIP inventory 31 Mar
  = Beginning units + Units started – Units transferred
  = 9000 + 162000 – 164100
  = 6900 units
• Requirement [b]

	Whole units	EU for DM	EU for Conversion
Inventory in Process, Beginning	9,000	-	1,800 [9000 x 1/5]
Started and completed	155,100	155,100	155,100
Transferred to packing department	164,100	155,100	156,900
Inventory in Process Ending	6,900	6,900	4,140 [6900 x 3/5]
Total	171,000	162,000	161,040