Question

Costs per Equivalent Unit 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 Mar. 1 Bal., 7,500 units, 2/5 completed 12,150 31 Direct materials, 135,000 units 189,000 201,150 31 Direct labor 53,130 254,280 31 Factory overhead 29,886 284,166 31 Goods finished, 136,800 units 273,450 10,716 31 Bal units, 4/5 completed 10,716 . Based on the above data, determine each cost listed below. Round "cost per equivalent unit answers to the nearest cont. 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? Increase { Previous Next?

Answer 1

		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	7500	0	4500
Started and completed in March	129300	129300	129300
Transferred to Finished goods in March	136800	129300	133800
Inventory in process, March 31	5700	5700	4560
Total units to be assigned costs	142500	135000	138360
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Baking Department		189000	83016
Total equivalent units		135000	138360
Cost per equivalent unit		1.40	0.60
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			12150
Costs incurred in March			272016
Total costs accounted for by the Baking Department			284166
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			12150
To complete inventory in process, March 1	0	2700	2700
Cost of completed March 1 work in process			14850
Started and completed in March	181020	77580	258600
Transferred to Finished goods in March			273450
Inventory in process, March 31	7980	2736	10716
Total costs assigned by the Baking Department			284166
1. Direct materials cost per equivalent unit $1.40
2. Conversion cost per equivalent unit $0.60
3. Cost of beginning work in process completed during March $14850
4. Cost of units started and completed during March $258600
5. Cost of the ending work in process $10716
b
Conversion cost per equivalent unit prior period = (12150-7500*1.40)/(7500*2/5)= $0.55
Conversion cost per equivalent unit increase