Question

Costs per Equivalent Unit 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. Date Item Debit Credit Balance Debit Credit Dec. 1 Bal., 5,700 units, 4/5 completed 14,250 31 Direct materials, 102,600 units 194,940 209,190 31 Direct labor 52,250 261,440 31 Factory overhead 29,398 290,838 31 Goods finished, 104,100 units 280,842 9,996 31 Bal., ? units, 3/5 completed 9,996 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 December $ 4. Cost of units started and completed during December $ 5. Cost of the ending work in process $ b. Assuming that the direct materials cost is the same for November and December, did the conversion cost per equivalent unit increase, decrease, or remain the same in December? Increase Check My Work2 more Check My Work uses remaining.

Answer 1

		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, December 1	5700	0	1140
Started and completed in December	98400	98400	98400
Transferred to Finished goods in December	104100	98400	99540
Inventory in process, December 31	4200	4200	2520
Total units to be assigned costs	108300	102600	102060
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for December in Baking Department		194940	81648
Total equivalent units		102600	102060
Cost per equivalent unit		1.90	0.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			14250
Costs incurred in December			276588
Total costs accounted for by the Baking Department			290838
Cost allocated to completed and partially completed units:
Inventory in process, December 1 balance			14250
To complete inventory in process, December 1	0	912	912
Cost of completed December 1 work in process			15162
Started and completed in December	186960	78720	265680
Transferred to Finished goods in December			280842
Inventory in process, December 31	7980	2016	9996
Total costs assigned by the Baking Department			290838
1. Direct materials cost per equivalent unit $1.90
2. Conversion cost per equivalent unit $0.80
3. Cost of beginning work in process completed during December $15162
4. Cost of units started and completed during December $265680
5. Cost of the ending work in process $9996
b
Conversion cost per equivalent unit prior period = (14250-5700*1.90)/(5700*4/5)= $0.75
Conversion cost per equivalent unit increase