Equivalent Units of Production and Related Costs The charges to Work in Process—

Question

Equivalent Units of Production and Related Costs

The charges to Work in Process—Baking Department for a period as well as information concerning production are as follows. The Baking Department uses the average cost method, and all direct materials are placed in process during production.

If required, round cost per equivalent unit answer to two decimal places.

a. Determine the number of whole units to be accounted for and to be assigned costs.
units

b. Determine the number of equivalent units of production.
units

c. Determine the cost per equivalent unit.
$ per equivalent unit

d. Determine the cost of the units transferred to Finished Goods.
$

e. Determine the cost of units in ending Work in Process.
$

Work in Process—Baking Department Bal., 2,400 units, 70% completed 4,872 To Finished Goods, 17,200 units ? Direct materials, 17,500 units 51,800 Direct labor 24,407 Factory overhead 12,573 Bal., 2,700 units, 30% completed ?

Explanation / Answer

a) Number of whole units to be accounted for and to be assigned cost is (2400+17500) = 19900 units

b) Equivalent unit = (17200+2700*30%) = 18010 units

c) cost per equivalent unit = (4872+51800+24407+12573)/18010 = 5.20 per equivalent unit

d) Cost of units transferred to finished goods = (5.20*17200) = 89440

e) Cost of units ending work in process = (2700*30%*5.20) = 4212

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