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.
Date		Item	Debit		Credit		Balance
							Debit		Credit
March	1	Bal., 6,300 units, 4/5 completed					18,900
	31	Direct materials, 113,400 units	170,100				189,000
	31	Direct labor	50,510				239,510
	31	Factory overhead	28,408				267,918
	31	Goods finished, 114,900 units			258,702		9,216
	31	Bal. ? units, 3/5 completed					9,216

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".

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

Answers

• All working forms part of the answer
• Requirement ‘a’

WIP Inventory at Mar 31 = Mar 1 Inventory + Units started – Units transferred or finished

= 6300 + 113400 – 114900
= 4800 units = Answer

Units Reconciliation
Units to account for:
Beginning WIP	6,300
Units started this period	113,400
Total Units to account for	119,700
Total Units accounted for:
Completed & Transferred out	114,900
Ending WIP	4,800
Total Units accounted for	119,700

• Requirement ‘b’

Baking Department
Equivalent Units of Production for Direct Materials and Conversion Costs
For March
	Whole Units	Direct Materials	Conversion Equivalent Units
		Equivalent Units
Inventory in process, March 1	6,300	-	1,260 [6300 x 1/5 completed this period]
Started and completed in March	108,600 [114900 – 6300]	108,600 [108600 x 100%]	108,600 [108600 x 100%]
Transferred to finished goods in March	114,900	108,600	109,860
Inventory in process, March 31	4,800	4,800 [4800 x 100%]	2,880 [4800 x 3/5 completed this period]
Total	119,700	113,400	112,740