Costs per Equivalent Unit The following information concerns production in the B

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.

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

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?

ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Mar. 1 Bal., 9,300 units, 4/5 completed 17,112 31 Direct materials, 167,400 units 234,360 251,472 31 Direct labor 63,890 315,362 31 Factory overhead 35,938 351,300 31 Goods finished, 169,500 units 338,628 12,672 31 Bal. ? units, 3/5 completed 12,672

Explanation / Answer

Cost of Production Report-Baking Department For the Month Ended March 31 Unit Information Units charged to production: Inventory in process, March 1 9300 Received from materials storeroom 167400 Total units accounted for by the Baking Department 176700 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, March 1 9300 0 1860 Started and completed in March 160200 160200 160200 Transferred to Packing Department in March 169500 160200 162060 Inventory in process, March 31 7200 7200 4320 Total units to be assigned costs 176700 167400 166380 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for March in Baking Department 234360 99828 Total equivalent units 167400 166380 Cost per equivalent unit 1.4 0.6 Costs charged to production: Direct Materials Conversion Total Inventory in process, March 1 17112 Costs incurred in March 334188 Total costs accounted for by the Baking Department 351300 Cost allocated to completed and partially completed units: Inventory in process, March 1 balance 17112 To complete inventory in process, March 1 0 1116 1116 Cost of completed March 1 work in process 18228 Started and completed in March 224280 96120 320400 Transferred to Packing Department in March 338628 Inventory in process, March 31 10080 2592 12672 Total costs assigned by the Baking Department 351300 1. Direct materials cost per equivalent unit $1.4 2. Conversion cost per equivalent unit. $0.6 3. Cost of the beginning work in process completed during March $18228 4. Cost of units started and completed during March $320400 5. Cost of the ending work in process. $12672 b Conversion cost per equivalent unit in February =(17112-(9300*1.4))/(9300/5*4)= $0.55 The conversion cost per equivalent unit increase in March

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