Equivalent Units of Production The following information concerns production in

Question

Equivalent Units of Production The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production. ACCOUNT Work in Process-Baking Department ACCOUNT NO. Balance Debit Credit Date Item Debit Credit Mar. 1 Bal., 18,000 units, V completed 14,760 266,760 306,760 367,290 46,410 20,880 20,880 31 Direct materials, 336,000 units252,000 40,000 60,530 31 Direct labor 31 Factory overhead 31 Goods finished, 330,000 units 31 Bal, 2 units, completed a. Determine the number of units in work in process inventory at March 31 units

Explanation / Answer

Answer a Number of units in work in process inventory at March 31 Units Beginning work in process 18000 Add : Units Started 336000 Less : Units completed and transferred 330000 Units in work in process at March 31 24000 Answer b Determination of equivalent units of production for direct material and conversion cost in March Baking Department Equivalent units of Production for Direct Materials and Conversion costs Whole Units Equivalent units direct Material Equivalent units conversion Inventory in Process,March 1 18000 0 13500 Started and completed in March 312000 312000 312000 Transferred to Finished Goods In March 330000 312000 325500 Inventory in Process,March 31 24000 24000 9600 Total 354000 336000 335100 Answer a-1 Direct Material cost per equivalent unit = Cost added during March / Equivalent units for Material cost Direct Material cost per equivalent unit = $252000 / 336000 units = $0.75 per equivalent unit Answer a-2 Conversion cost per equivalent unit = (Direct Labour + Factory Overheads) / Equivalent units for Conversion cost Conversion cost per equivalent unit = ($40000 + $60530) / 335100 units = $0.30 per equivalent unit Answer a-3 Cost of beginning work in process completed during March = 13500 equiavlent units * $0.30 per unit = $4050 Answer a-4 Cost of units started and completed during March Cost of beginning work in process $14,760.00 Cost of beginning work in process completed during March $4,050.00 Material cost = 312000 equivalent units * $0.75 pe unit = $234,000.00 Conversion cost = 312000 equivalent units * $0.30 pe unit = $93,600.00 Cost of units started and completed during March $346,410.00 Answer a-5 Cost of ending work in process Material cost = 24000 equivalent units * $0.75 pe unit = $18,000.00 Conversion cost = 9600 equivalent units * $0.30 pe unit = $2,880.00 Cost of ending work in process $20,880.00

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