Homework SourseThe following information concerns production in the Baking
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?
| ACCOUNT Work in Process—Baking Department | ACCOUNT NO. | |||||||
| Date | Item | Debit | Credit | Balance | ||||
| Debit | Credit | |||||||
| Mar. | 1 | Bal., 4,800 units, 2/5 completed | 11,232 | |||||
| 31 | Direct materials, 86,400 units | 172,800 | 184,032 | |||||
| 31 | Direct labor | 50,600 | 234,632 | |||||
| 31 | Factory overhead | 28,456 | 263,088 | |||||
| 31 | Goods finished, 87,600 units | 253,944 | 9,144 | |||||
| 31 | Bal. ? units, 3/5 completed | 9,144 | |
Solution
b.
material at beginning = 4800 * 2 = 9600
Total cost - material = Conversion cost
11232-9600 = 1632 for conversion cost
Conversion cost per unit = 1632/4800*40% = 0.85
So conversion cost per equivalent unit increase from .85 to .90
| FIFO method | |||
| Beggining units | 4800 | Transferred out | 87,600 |
| Started into production | 86400 | Ending units | 3,600 |
| 91200 | 91200 | ||
| Equivalent units | Material | Conversion | |
| Beginning units | 4800 | 4800 | |
| Completion in current period | 0% | 60% | |
| A | 0 | 2880 | |
| Units started and completed | 82800 | 82800 | |
| Completion | 100% | 100% | |
| B | 82800 | 82800 | |
| Ending Units | 3,600 | 3,600 | |
| Completion | 100% | 60% | |
| C | 3600 | 2160 | |
| Total units A+B+C | 86400 | 87840 | |
| Cost per equivalent units | |||
| Per unit cost | Cost | Total units | Per unit cost |
| Material cost | 172800 | 86400 | 2.00 |
| Conversion cost | 79056 | 87840 | 0.90 |
| Total | 251856 | 2.90 |
