Costs per concerns production in the Baking Department for March. All direct mat
ID: 2400472 • Letter: C
Question
Costs per concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production. ACCOUNT NO. Balance Debit Credit Debit Credit Date Item 11,232 184,032 234,632 263,088 253,944 9,144 9,144 Mar. 1 Bal, 4,800 units, 2/5 completed 31 Direct materials, 86,400 units 31 Direct labor 31 Factory overhead 31 Goods finished, 87,600 units 31 Bal. 7 units, 3/5 completed 172,800 50,600 28,456 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?Explanation / Answer
UNITS TO ACCOUNT FOR: Beginning Work in Process units 4,800 Add: Units Started in Process 86,400 Total Units to account for: 91,200 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 4800 Units started and completed 82,800 Ending Work in Process 3,600 Total Units to be accounted for: 91,200 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 60% 2,880 Units started and completed 100% 82,800 100% 82,800 Ending Work in Process 100% 3,600 60% 2,160 Total Equivalent units 86,400 87,840 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 172,800 79,056 Equivalent Units 86,400 87,840 Cost per Equivalent unit 2 0.9 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (4800 units) Equivalent unit Cost per EU Total Cost Beginning Cost 11232 Material 0 2 0 Conversion Cost 2,880 0.9 2592 Cost of units completed from Beg WIP 13824 Units started and Transferred out (82800 units) Equivalent unit Cost per EU Total Cost Material 82,800 2 165600 Conversion Cost 82,800 0.9 74520 Total Cost of Units completed and transferred out: 240120 Ending Work in process (3600 units) Equivalent unit Cost per EU Total Cost Material 3,600 2 7200 Conversison Cost 2,160 0.9 1944 Total cost of Ending Work in process: 9,144 Req1: Material cost per equivalent unit: $ 2.00 Req 2: Conversion cost per equivalent unit: $ 0.90 Req 3: Cost of Beginning WIP completed: $ 13824 Req 4: Cost of units started and completed: $ 240120 Req 5: cost of Ending WIP is $ 9144 Req b: Beginning Cost of WIP 11232 Less: material cost (4800*2) 9600 Total conversion cost 1632 Divide: Equivalent units completed last year 1920 Conversion cost per unit 0.85 Thus the conversion cost in the current year is increased by $ 0.05 per unit