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., 5,700 units, 2/5 completed 8,664 31 Direct materials, 102,600 units 133,380 142,044 31 Direct labor 40,390 182,434 31 Factory overhead 22,718 205,152 31 Goods finished, 104,100 units 197,676 7,476 31 Bal. ? units, 4/5 completed 7,476

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 5,700 Add: Units Started in Process 102,600 Total Units to account for: 108,300 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 5700 Units started and completed 98,400 Ending Work in Process 4,200 Total Units to be accounted for: 108,300 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 60% 3,420 Units started and completed 100% 98,400 100% 98,400 Ending Work in Process 100% 4,200 80% 3,360 Total Equivalent units 102,600 105,180 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 133,380 63,108 Equivalent Units 102,600 105,180 Cost per Equivalent unit 1.3 0.6 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (5700 units) Equivalent unit Cost per EU Total Cost Beginning Cost 8664 Material 0 1.3 0 Conversion Cost 3,420 0.6 2052 Cost of units completed from Beg WIP 10716 Units started and Transferred out (98400 units) Equivalent unit Cost per EU Total Cost Material 98,400 1.3 127920 Conversion Cost 98,400 0.6 59040 Total Cost of Units completed and transferred out: 186960 Ending Work in process (4200 units) Equivalent unit Cost per EU Total Cost Material 4,200 1.3 5460 Conversion Cost 3,360 0.6 2016 Total cost of Ending Work in process: 7,476 Req A: Material cost per eqiu. Unit: $ 1.30 per unit Req b: Conversion cost per eq. unit: $ 0.60 pere unit Req c: Cost of beg. WIP completed: $ 10716 Req d: Cost of units started and completed: $ 186,960 Req e: Cost of ending WIP: $ 7476 Req b: Cost of Beginning WIP 8664 Less: material cost (5700*1.30) 7410 Conversion cost 1254 Number of Eq. conversion cost units 2280 Conversion cost per unit 0.55 The conversion cost has been INCREASED from last year.

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