# Equivalent units of production The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production. a. Determine the number of units in work in process inventory at March 31. b. Determine the equivalent units of production for direct materials and conversion costs in March.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 20, Problem 20.7EX
Textbook Problem

## Equivalent units of productionThe following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.a. Determine the number of units in work in process inventory at March 31.b. Determine the equivalent units of production for direct materials and conversion costs in March.

Expert Solution

(a)

Process costs

It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.

Equivalents units for production

The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process.

To determine

To Identify: The ending balance of work in process inventory for baking department.

### Explanation of Solution

Calculate ending balance of work in process inventory for baking department as shown below:

 Particulars Units Opening balance of work in process inventory 18,000 Add: Units produced during the period of March 336,000 Less: Finished goods during the period of March ...
Expert Solution

(b)

To determine
The equivalents units of production for direct materials and conversion costs for the month of March.

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