Question

The following information concerns production in the Baking Department for December. 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 Dec. 1 Bal., 6,000 units, 2/5 completed 31 Direct materials, 108,000 units 31 Direct labor 31 Factory overhead 31 Goods finished, 109,500 units 31 Bal., 2 units, 2/5 completed 194,400 55,760 31,360 12,600 207,000 262,760 294,120 9,540 284,580 9,540

Answer 1

Calculation of Equivalent units

	Whole units	Direct materials	Conversion costs
Inventory in process, Dec 1	6,000	0	3,600
Started and completed	103,500	103,500	103,500
Transferred to Finished goods	109,500	109,500	109,500
Inventory in process, Dec 31	4,500	4,500	1,800
Total units	114,000	114,000	114,900

Cost information

	Direct materials	Conversion costs
Total costs	194,400	87,120
Total equivalent units	114,000	114,900
Cost per equivalent e	$1.70	$0.75

Cost charged to production

	Direct materials	Conversion costs	Total
Inventory in process, Dec 1			$12,600
Cost incurred in December			$281,520
Total cost occurred by banking department			$294,120
Cost allocated to completed & partially completed units :
Inventory in process, Dec 1			12,600
To complete inventory in process, Dec 1	0	$2,700	$2,700
Cost of completed, Dec 1 work in progress			$15,300
Started & Completed in December	$175,950	$77,625	$253,575
Transferred to Finished goods in December			$268,875
Inventory in process, Dec 31	$7,650	$1,350	$9,000
Total costs assigned by banking department			$277,875

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