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., 4,200 units, 3/5 completed 8,778 Direct materials, 75,600 31 units 128,520 137,298 31 Direct labor 34,330 171,628 19,304 190,932 31 Factory overhead 31 Goods finished, 76,500 units 31 Bal. ? units, 4/5 completed 183,474 7,458 7,458 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? Increase Feedback

Answer 1

1.Direct materials cost per equivalent unit= $1.70;

2. Conversion cost per equivalent unit= $0.70;

3. Cost of beginning WIP completed during march = $9,954;

4. Cost of units started and completed during march = $173,520;

5. Cost of ending WIP completed during march = $7,458;

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А B C D E F 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Cost of Production Report-Baking Department For the Month Ended March 31 Unit Information Units charged to production: Inventory in process.Mar.1 4,200 Received from materials stores 75,600 Total units accounted for by Roasting Department 79,800 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversions Inventory in process.Mar 1 4,200 1,680 Started and Completed in July 72,300 72,300 72,300 Transferred to Packing Dep. In July 76,500 72,300 73,980 Inventory in process,Mar 31 3,300 3,300 2,640 Total Units to be assigned costs 79,800 75,600 76,620 Cost Information Cost per Equivalent Unit: Direct Materials Conversions Total Costs for July in Roasting Department $ 128,520$ 53,634 Total Equivalent units 75,600 76,620 Cost per Equivalent Unit: $ 1.70 $ 0.70 Costs assigned to Production: Direct Materials Conversions Total Inventory in process.Mar 1 $ 8,778 Costs incurred in March $ 182,154 Total Costs accounted for by Roasting Department. $ 190,932 Costs allocated to completed and partial completed: Inventory in process, Mar 1Balance $ 8,778 To Complete Inventory in process, Mar 1 $ $ 1,176 $ 1,176 Cost of completed Mar 1 WIP $ 9,954 Started and Completed in March $ 122,910 $ 50,610 $ 173,520 Transferred to Molding Department in March $ 183,474 Inventory in process, March 31 $ 5,610 $ 1,848 $ 7,458 Total Costs assigned by Roasting Department $ 190,932

A B D E F 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Cost of Production Report-Baking Department For the Month Ended March 31 Unit Information Units charged to production: Inventory in process, Mar.1 4200 Received from materials stores 75600 Total units accounted for by Roasting Department =F6+F7 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversions Inventory in process.Mar 1 =F6 =D12*0% =D12*2/5 Started and Completed in July =D14-D12 =D13*100% =D13*100% Transferred to Packing Dep. In July 76500 =E12+E13 =F12+F13 Inventory in process.Mar 31 =D16-014 =D15*100% =D15*4/5 Total Units to be assigned costs =F8 =E14+E15 =F14+F15 Cost Information Cost per Equivalent Unit: Direct Materials Conversions Total Costs for July in Roasting Department 128520 = 34330+19304 Total Equivalent units =E16 =F16 Cost per Equivalent Unit: =E20/E21 =ROUND(F20/F21,2) Costs assigned to Production: Direct Materials Conversions Total Inventory in process, Mar 1 8778 Costs incurred in March =E20+F20 Total Costs accounted for by Roasting Department. =F25+F26 Costs allocated to completed and partial completed: Inventory in process,Mar 1Balance =F25 To Complete Inventory in process, Mar 1 =E22 E12 =F22 F12 =D30+E30 Cost of completed Mar 1 WIP =F29+F30 Started and Completed in March 1=E22°E13 =F22 F13 =D32+E32 Transferred to Molding Department in March =F31+F32 Inventory in process, March 31 =E15 E22 =F22*F15 =D34+E34 Total Costs assigned by Roasting Department =F33+F34 33 34 35 36

*FIFO:
*It assigns the cost of the previous period's equivalent units in beginning WIP to the first units completed
and transferred out of the process, and assigns the cost of equivalent units worked on during
the current period first to complete beginning inventory, Then to start and complete new units,
and finally to units in Ending WIP inventory.
*FIFO costing method is that work done on beginning inventory before the current period is kept
separate from work done in the current period.
*Equivalent units in Beginning WIP + Equivalent units of work done in current period = Equivalent units in Beginning WIP + Equivalent units completed and transferred out in current period + Equivalent units in Ending WIP.

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