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., 4,800 units, 1/3 completed 10,960 31 Direct materials, 86,400 units 172,800 183,760 31 Direct labor 51,190 234,950 31 Factory overhead 28,802 263,752 31 Goods finished, 87,600 units 253,960 9,792 31 Bal.? units, 4/5 completed 9,792 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

1 Direct materials cost per equivalent unit $2.00 2 Conversion cost per equivalent unit $0.90 Cost of beginning work in process completed during March 3 $13,840 4 Cost of units started and completed during March $240,120 5 Cost of ending work in process $9,792 b Increase March month Prior month total cost per unit Current month total cost per unit Increase in conversion cost $2.88 ($10,960 + $2,880)/4,800 units $2.90 see working below $0.02 Unit Information Units charged to production Inventory in process, March 1 Received from materials storeroom Total Units accounted for Units to be assigned cost: 4,8001 86,4001 91,200 whole units 4,800 82,800 87,600 3,600 91,200 Equivalent Units % Direct % Conversion Completed Materials Completed Cost 67% 3,200 100% 82,800 100% 82,800 Inventory in process, March 1 Started and completed in March Transferred to Finished goods Inventory in process, March 31 Total units to be assigned costs 100% 80% 3,600 86,400 2,880 88,880 Cost Information Cost per equivalent unit Conversion Total cost for March in Baking department Total equivalent units Cost per equivalent unit Direct Materials $172,800 86,400 $2.00 $79,992 88,880 $0.90 Cost assigned to production Total Inventory in process, March 1 Costs incurred in March Total costs accounted $10,960 $252,7921 $263,752 Total Cost allocated to completed and partially completed units: Direct Conversion Materials Inventory in process, March 1 balance To complete inventory in process, March 1 $0 $2,880 Cost of completed March 1, work in process Started and completed units in March $165,600 $74,5201 Transferred to Finished goods in March Inventory in process, March 31 $7,200 $2,592 Total Cost assigned $10,960 $2,880 $13,840 $240,120 $253,960 A $9,792 B $263,752 A+B