Question

The following information concerns products in the Baking Department for March. All direct materials are placed in the process at the beginning of production.

ACCOUNT Work in Process—Baking Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 8,100 units, 3/5 completed					16,929
	31	Direct materials, 145,800 units	247,860				264,789
	31	Direct labor	65,640				330,429
	31	Factory overhead	36,924				367,353
	31	Goods finished, 147,600 units			353,997		13,356
	31	Bal. ? units, 3/5 completed					13,356

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?

DECREASE or INCREASE or REMAIN THE SAME

Answer 1

A) Equivalent unit of material = 145800 Units

Direct material cost per equivalent unit = 247860/145800 = 1.70

b) Equivalent unit of conversion = (8100*2/5+139500+6300*3/5) = 146520

Conversion Cost per equivalent unit = (65640+36924)/146520 = 0.70

c) Cost of beginning WIP completed during March = 3240*.70+16929 = 19197

d) Cost of unit started and completed = 2.4*139500 = 334800

e) Cost of ending WIP = (6300*1.7+3780*.70) = 13356

2) Cost of direct material in Beginning WIP = 8100*1.7 = 13770

Cost of conversion in Beginning WIP = 16929-13770 = 3159

Equivalent unit of conversion in beginning WIP = 8100*3/5 = 4860

Cost per equivalent unit of conversion = 3159/4860 = 0.65

Increase by 0.05