The following information concerns production in the Baking Department for March

Question

The following information concerns production in the Baking Department for March. 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 February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?
Increase

ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Mar. 1 Bal., 18,000 units, 1?4 completed 14,760 31 Direct materials, 336,000 units 252,000 266,760 31 Direct labor 40,000 306,760 31 Factory overhead 60,530 367,290 31 Goods finished, 330,000 units 346,410 20,880 31 Bal. ? units, 2?5 completed 20,880

Explanation / Answer

Cost of Production Report-Baking Department For the Month Ended March 31 Unit Information Units charged to production: Inventory in process, March 1 18000 Received from materials storeroom 336000 Total units accounted for by the Baking Department 354000 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, March 1 18000 0 13500 Started and completed in March 312000 312000 312000 Transferred to Packing Department in March 330000 312000 325500 Inventory in process, March 31 24000 24000 9600 Total units to be assigned costs 354000 336000 335100 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for March in Baking Department 252000 100530 Total equivalent units 336000 335100 Cost per equivalent unit 0.75 0.3 Costs charged to production: Direct Materials Conversion Total Inventory in process, March 1 14760 Costs incurred in March 352530 Total costs accounted for by the Baking Department 367290 Cost allocated to completed and partially completed units: Inventory in process, March 1 balance 14760 To complete inventory in process, March 1 0 4050 4050 Cost of completed March 1 work in process 18810 Started and completed in March 234000 93600 327600 Transferred to Packing Department in March 346410 Inventory in process, March 31 18000 2880 20880 Total costs assigned by the Baking Department 367290 1. Direct materials cost per equivalent unit. $0.75 2. Conversion cost per equivalent unit. $0.3 3. Cost of the beginning work in process completed during March. $18810 4. Cost of units started and completed during March. $327600 5. Cost of the ending work in process. $20880 b Increase

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