Assignment: 20-4 Homework - Exercise 20-8 Costs per Equivalent Unit - The follow

Question

Assignment: 20-4 Homework - Exercise 20-8

Costs per Equivalent Unit - The following information concerns production in the Baking Department for July. 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 June and July, did the conversion cost per equivalent unit increase, decrease, or remain the same in July?
Decrease OR Increase OR Remain the same

****I AM COMING WITH $1920 for #3 for the cost of the beginning work in process completed in July BUT CENGAGE is telling me I am wrong... PLEAS HELP***

*(you can refer to the image url http://cvg.cengagenow.com/ilrn/books/waac25h/images/ch20/waac25h_ch20_ex20_7.gif)

Costs per Equivalent Unit - The following information concerns production in the Baking Department for July. 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.

1. Direct materials cost per equivalent unit. $ 2. Conversion cost per equivalent unit. $ 3. Cost of the beginning work in process completed during July. $ 4. Cost of units started and completed during July. $ 5. Cost of the ending work in process. $

*B. Assuming that the direct materials cost is the same for June and July, did the conversion cost per equivalent unit increase, decrease, or remain the same in July?
Decrease OR Increase OR Remain the same

****I AM COMING WITH $1920 for #3 for the cost of the beginning work in process completed in July BUT CENGAGE is telling me I am wrong... PLEAS HELP***

*(you can refer to the image url http://cvg.cengagenow.com/ilrn/books/waac25h/images/ch20/waac25h_ch20_ex20_7.gif)

Explanation / Answer

A) 1. Direct Materials cost per equivalent unit    = $1.90

2) Conversion cost per equivalent unit = $0.40

3) Cost of the beginning WIP completed during July = $1920+16576 = $18,496

4) Cost of units started and completed in July = $343,620

5) Cost of the ending WIP = $26,964

B) Cost of opening WIP                    = 16,576

    Material cost if same as July         = 15,200   (1.9*8000)

    Conversion cost (difference)         =    1,376    (40% complete)

    Full coversion cost =1376/0.40      =    3,440

    Per unit                 = 3440/8000    =    $0.43

Hence, the cost per equivalent unit for conversion cost had decreased in july; from 0.43 in june to 0.40 in july.

Calculations are given below:

Equivalent units Units Materials Labour FOH Total Opening WIP completed 8000 0 4800 4800 Introduced & completed 149400 149400 149400 149400 Closing WIP-work done 12600 12600 7560 7560 170000 162000 161760 161760 cost incurred in July 307800 43600 21104 372504 cost per equivalent unit 1.90 0.27 0.13 costs assigned to: Opening WIP-current     month's cost 0 1294 626 1920 Intoduced and completed 283860 40269 19491 343620 Closing WIP 23940 2038 986 26964 372504 Goods finished and trfd 16576+1920+343620 = 362116

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