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takeAssignment takeAssignmentManoinvoker assignments8 takeAssignmentsesson ocat raassgment take& pr m ACCOUNT Work in Process-Baking Department ACCOUNT NO. Balance Debit Credit Date Item Debit Credit Mar. 1 Bal., 18,000 units, 1/4 completed 31 Direct materials, 336,000 units 31 Direct labor 31 Factory overhead 31 Goods finished, 330,000 units 31 Bal. 2 units, 2/5 completed 14,760 266,760 306,760 367,290 346,410 20,880 20,880 252,000 40,000 60,530 a. Based on the above data, determine each cost listed below. Round "cost per equivalent unt" answers to the neerest 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 equlvalent unit increase, decrease, or remain the same in March? Previous Check My Work 1:38 PM

Explanation / Answer

Answer:

Note: In absence of any specific information, I am solving it using FIFO method of inventory valuation.

Calculating Equivalent Units of Production:

Beginning Units = 18,000 units; 1/4 completed. That means these units are worked for remaining 3/4 in the month of March. So Equivalent units = 18,000*3/4 = 13,500 equivalent units out of Beginning Balance

Units Introduced in March: 336,000 units introduced

Completed units is March = 330,000 units

That means 18,000 units out of beginning units and 312,000 units out of fresh units are 100% complete as on end of March.

Also, the Balance units 24,000 (336,000 312,000) are 2/5 completed. That means equivalent units in ending inventory = 24,000*2/5 = 9,600 equivalent units

So, Total of Equivalent Units in March = 13,500 + 312,000 + 9,600 = 335,100 equivalent units produced

Now,

Direct Material Cost per equivalent unit = Total DM Cost / No. of Equivalent Units = 252000 / 335100 = $ 0.7520

Conversion Cost per equivalent unit = (Direct Labour + Factory Overhead) / No. of Equivalent Units = (40000 + 60530) / 335100 = $ 0.30

Cost of beginning WIP completed in March = Cost brought forward + cost incurred in March = $ 14,760 + 13,500*(0.752 + 0.30) = 14760 + 14,202 = $ 28,962

Cost of units started and completed during march = 312000*(0.752 + 0.30) = $ 328,224

Cost of ending WIP = 9,600*(0.752 + 0.30) = $ 10,099.20

b. Since the conversion cost is independent of Direct Material Cost, it shall reamin the same in march.

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