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., 7,500 units, 4/5 completed					13,050
	31	Direct materials, 135,000 units	175,500				188,550
	31	Direct labor	51,100				239,650
	31	Factory overhead	28,748				268,398
	31	Goods finished, 136,800 units			259,620		8,778
	31	Bal. ? units, 2/5 completed					8,778

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

Ending work in process = 7500+135000-136800 = 5700 Unit

Equivalent unit of material = (7500*0%+129300*100%+5700*100%) = 135000

Equivalent unit of conversion = (7500*1/5+129300*100%+5700*2/5) = 133080

1) Direct material cost per equivalent unit = 175500/135000 = 1.3

2) Conversion Cost per equivalent unit = (51100+28748)/133080 = 0.6

3) Cost of the beginning work in process completed during march = 1500*.60+13050 = $13950

4) Cost of unit started and completed = 1.9*129300 = $245670

5) Cost of ending work in process = 5700*1.3+2280*.6 = $8778

Material cost in beginning work in process = 7500*1.3 = 9750

Conversion Cost in beginning work in process = 13050-9750 = 3300

Conversion Cost equivalent unit = 7500*4/5 = 6000

Conversion Cost per equivalent unit = 3300/6000 = 0.55

In march conversion Cost per equivalent unit increase