Question

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.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 4,500 units, 2/5 completed					9,900
	31	Direct materials, 81,000 units	153,900				163,800
	31	Direct labor	41,840				205,640
	31	Factory overhead	23,536				229,176
	31	Goods finished, 82,200 units			221,850		7,326
	31	Bal. ? units, 2/5 completed					7,326

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

		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	4500	0	2700
Started and completed in March	77700	77700	77700
Transferred to Finished goods in March	82200	77700	80400
Inventory in process, March 31	3300	3300	1320
Total units to be assigned costs	85500	81000	81720
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Baking Department		153900	65376
Total equivalent units		81000	81720
Cost per equivalent unit		1.90	0.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			9900
Costs incurred in March			219276
Total costs accounted for by the Baking Department			229176
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			9900
To complete inventory in process, March 1	0	2160	2160
Cost of completed March 1 work in process			12060
Started and completed in March	147630	62160	209790
Transferred to Finished goods in March			221850
Inventory in process, March 31	6270	1056	7326
Total costs assigned by the Baking Department			229176
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 March $12060
4. Cost of units started and completed during March $209790
5. Cost of the ending work in process $7326
b
Conversion cost per equivalent unit prior period = (9900-4500*1.90)/(4500*2/5)= $0.75
Conversion cost per equivalent unit increase