Question

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., 6,900 units, 2/5 completed					14,490
	31	Direct materials, 124,200 units	223,560				238,050
	31	Direct labor	65,190				303,240
	31	Factory overhead	36,666				339,906
	31	Goods finished, 126,000 units			327,462		12,444
	31	Bal., ? units, 4/5 completed					12,444

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?

Answer 1

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 (223560/124200)	$1.80
2. Conversion cost per equivalent unit (65190+36666)/127320	$0.80
3. Cost of the beginning work in process completed during December (6900*3/5*.80+14490)	$17802
4. Cost of units started and completed during December (2.6*119100)	$309660
5. Cost of the ending work in process (5100*1.8+4080*.80)	$12444

Direct material cost in beginning WIP = 6900*1.8 = 12420

Conversion Cost in beginning WIP = 14490-12420 = 2070

Equivalent unit of conversion in beginning WIP = 6900*2/5 = 2760

Conversion cost per equivalent unit = 2070/2760 = 0.75

Increase by 0.05