Question

Cost of Production Report

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:

ACCOUNT Work in Process—Roasting Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
July	1	Bal., 5,100 units, 3/5 completed					17,544
	31	Direct materials, 229,500 units	688,500				706,044
	31	Direct labor	145,800				851,844
	31	Factory overhead	36,488				888,332
	31	Goods transferred, 230,000 units			?
	31	Bal., ? units, 1/5 completed					?

Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.

Hana Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended July 31
Unit Information
Units charged to production:
Inventory in process, July 1
Received from materials storeroom
Total units accounted for by the Roasting Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1
Started and completed in July
Transferred to Packing Department in July
Inventory in process, July 31
Total units to be assigned costs
Cost Information
Cost per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$
Costs incurred in July
Total costs accounted for by the Roasting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, July 1 balance			$
To complete inventory in process, July 1	$	$
Cost of completed July 1 work in process			$
Started and completed in July
Transferred to Molding Department in July			$
Inventory in process, July 31
Total costs assigned by the Roasting Department			$

Feedback

1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

2. Assuming that the July 1 work in process inventory includes $14,790 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$
Change in conversion cost per equivalent unit		$

Feedback

2. Compare the costs per equivalent unit for February and July. The costs per equivalent unit for materials and conversion for February are in the July 1 work in process inventory. The materials amount is given.

Feedback

Partially correct

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				5,100
Add: Units Started in Process				229,500
Total Units to account for:				234,600
UNITS TO BE ACCOUNTED FOR:
Equivalent Units:
			Units	Materail	Conversion
				Units	Units
Units completed from Beg. WIP			5100	0	2,040
Units started and completed			224900	224,900	224,900
Units transferred to packing			230000	224,900	226,940
Ending Work in Process			4600	4,600	920
Total Equivalent units				229,500	227,860
COST PER EQUIVALENT UNIT:
				Material	Conversion
Total cost added during the year				688,500	182,288
Equivalent Units				229,500	227,860
Cost per Equivalent unit				3	0.8
Cost assigned to production:
				Material	Conversion	Total
Inventory in Beg. Process						17544
Cost incured in July				688500	182288	870788
Total cost to be accounted for:				688500	182288	888332
Cost allocated as follows:
Inventory in process in beg.						17544
To complete inventory in process				0	1632	1632
cost of completed July 1 in process						19176
Started and completed				674700	179920	854620
Transferred to Molding department						873796
Inventory in Process July 31				13800	736	14536
Total cost assigned to Roasting deptt.				688500	182288	888332
Req 2:
Total Cost of Begg Wip			17544
Material cost			14790
Converesion cost			2754
Material cost per unit (14790/5100):				2.9
Conversion cost per unit (2754/3060):				0.9
Change in material cost per unit				Increased by $ 0.10 per unit
Change in Conversion cost per unit				Decreased by $ 0.10 per unit