The folilowing information concems production in the Baking Department for March

Question

The folilowing information concems production in the Baking Department for March. All direct materials are placed in process at the beginning of production. ACCOUNT NO. Balance Date Item Debit Credit 31 Direct materials, 124,200 units 31 Direct labor 31 Factory overhead 31 Goods finished, 126,000 units 31 Bal. 7 units, 2/5 completed 11,247 172,707 220,287 247,047 239,1937,854 7,854 161,460 26,760 Based on the above data, determine each cost listed below. Round "cost per equivalent uni" answers to the nearest cent. AALGO 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 i s the same for February and March, did the conversion cost per equivalent unit increase, decrease, or i March? Previous Next

Explanation / Answer

Calculation of equivalent units for Material and conversion cost Physical Units % Complete with repect to Material cost Equivalent units for Material cost % Complete with repect to Conversion cost Equivalent units for Conversion cost Units completed - Out of beginning WIP 6900 0% 0 40% 2760 - Out of units introduced 119100 100% 119100 100% 119100 Units in process on Mar.31 5100 100% 5100 40% 2040 Equivalent units 124200 123900 Direct Material cost per equivalent unit = Total direct material cost / Equivalent units = $161460 / 124200 units = $1.30 Conversion cost per equivalent unit = (Direct labour cost + Factory overhead) / equivalent units = $74340 / 123900 units =$0.60 Cost of beginning work in process completed during March Cost of beginning WIP $11,247.00 Add : Conversion cost (2760 units * $0.60) $1,656.00 Cost of beginning work in process completed during March $12,903.00 Cost of units started and completed during March Material cost (119100 units * $1.30) $154,830.00 Add : Conversion cost (119100 units * $0.60) $71,460.00 Cost fo units started and completed during March $226,290.00 Cost of ending wok in process Material cost (5100 units * $1.30) $6,630.00 Add : Conversion cost (2040 units * $0.60) $1,224.00 Cost of ending work in process $7,854.00 Working Calculation of physical units in process at March 31st Units in process on Mar.1 6900 Add : Units introduced into process 124200 Less : Units transferred to FG 126000 Units in process on Mar.31 5100

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