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., 18,000 units, 14 completed 14,760 31 Direct materials, 336,000 units 252,000 266,760 31 Direct labor 40,000 306,760 31 Factory overhead 60,530 367,290 31 Goods finished, 330,000 units 346,410 20,880 31 Bal. ? units, 25 completed 20,880

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 18,000 Add: Units Started in Process 336,000 Total Units to account for: 354,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 18000 Units started and completed 312,000 Ending Work in Process 24,000 Total Units to be accounted for: 354,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 75% 13,500 Units started and completed 100% 312,000 100% 312,000 Ending Work in Process 100% 24,000 40% 9,600 Total Equivalent units 336,000 335,100 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 252,000 100,530 Equivalent Units 336,000 335,100 Cost per Equivalent unit 0.75 0.3 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (18000 units) Equivalent unit Cost per EU Total Cost Beginning Cost 14760 Material 0 0.75 0 Conversion Cost 13,500 0.3 4050 Cost of units completed from Beg WIP 18810 Units started and Transferred out (312000 units) Equivalent unit Cost per EU Total Cost Material 312,000 0.75 234000 Conversion Cost 312,000 0.3 93600 Total Cost of Units completed and transferred out: 327600 Ending Work in process (24,000 units) Equivalent unit Cost per EU Total Cost Material 24,000 0.75 18000 Conversison Cost 9,600 0.3 2880 Total cost of Ending Work in process: 20,880 Req 1. Direct material cost per uit: 0.75 Req 2.: Conversion cost per unit: 0.30 per unit Req 3.. Cost of beginning WIP :   $ 18810 Req 4. Cost of Units started and completed: $ 327600 Req 5. Cost of Ending WIP: $ 20880 Req b: Beginning Cost of WIP 14760 Less: Material cost (18000*0.75) 13500 Conversion cost included 1260 Divide: Conversion EUP 4500 Conversion cost per unit Feb 0.28 Hence, conversion cost has been increased as compared to Feb.

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