Question

Cost of Production Report

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 1,000 pounds, 20% completed				$3,460*
	*Direct materials (1,000 X $3.2)	$3,200
	Conversion (1,000 X 20% X $1.3)	$260
		$3,460
Coffee beans added during August, 31,000 pounds				97,650
Conversion costs during August				43,624
Work in process, August 31, 1,600 pounds, 60% completed				?
Goods finished during August, 30,400 pounds				?

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

1. Direct materials and conversion equivalent units of production for August
2. Direct materials and conversion costs per equivalent unit for August
3. Cost of goods finished during August
4. Cost of work in process at August 31

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1			fill in the blank 4c12b1f9f037063_1
Received from materials storeroom			fill in the blank 4c12b1f9f037063_2
Total units accounted for by the Roasting Department			fill in the blank 4c12b1f9f037063_3
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1	fill in the blank 4c12b1f9f037063_4	fill in the blank 4c12b1f9f037063_5	fill in the blank 4c12b1f9f037063_6
Started and completed in August	fill in the blank 4c12b1f9f037063_7	fill in the blank 4c12b1f9f037063_8	fill in the blank 4c12b1f9f037063_9
Transferred to finished goods in August	fill in the blank 4c12b1f9f037063_10	fill in the blank 4c12b1f9f037063_11	fill in the blank 4c12b1f9f037063_12
Inventory in process, August 31	fill in the blank 4c12b1f9f037063_13	fill in the blank 4c12b1f9f037063_14	fill in the blank 4c12b1f9f037063_15
Total units to be assigned costs	fill in the blank 4c12b1f9f037063_16	fill in the blank 4c12b1f9f037063_17	fill in the blank 4c12b1f9f037063_18
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$fill in the blank 4c12b1f9f037063_19	$fill in the blank 4c12b1f9f037063_20
Total equivalent units		fill in the blank 4c12b1f9f037063_21	fill in the blank 4c12b1f9f037063_22
Cost per equivalent unit (2)		$fill in the blank 4c12b1f9f037063_23	$fill in the blank 4c12b1f9f037063_24
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$fill in the blank 4c12b1f9f037063_25
Costs incurred in August			fill in the blank 4c12b1f9f037063_26
Total costs accounted for by the Roasting Department			$fill in the blank 4c12b1f9f037063_27
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$fill in the blank 4c12b1f9f037063_28
To complete inventory in process, August 1	$fill in the blank 4c12b1f9f037063_29	$fill in the blank 4c12b1f9f037063_30	fill in the blank 4c12b1f9f037063_31
Cost of completed August 1 work in process			$fill in the blank 4c12b1f9f037063_32
Started and completed in August	fill in the blank 4c12b1f9f037063_33	fill in the blank 4c12b1f9f037063_34	fill in the blank 4c12b1f9f037063_35
Transferred to finished goods in August (3)			$fill in the blank 4c12b1f9f037063_36
Inventory in process, August 31 (4)	fill in the blank 4c12b1f9f037063_37	fill in the blank 4c12b1f9f037063_38	fill in the blank 4c12b1f9f037063_39
Total costs assigned by the Roasting Department			$fill in the blank 4c12b1f9f037063_40

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$fill in the blank dbe051006065fbe_2
Change in conversion cost per equivalent unit		fill in the blank dbe051006065fbe_4

Answer 1

Morning Brew Coffee
Started and completed in Aug	Note B
Goods transferred out in Aug	30,400.00
Less: Opening work in process	1,000.00
Started and completed in Aug	29,400.00

Cost of Production Report-Roasting Department
For the Month Ended Aug 31
Unit information
Units charged to production:	Physical Units
Inventory in process Aug 1	1,000.00
Direct materials received	31,000.00
Total units accounted for by the Roasting Department	32,000.00

		Equivalent Units
Units to be assigned costs:	Physical Units	Materials	Conversion
Inventory in process Aug 1	1,000.00	-	800.00
Started and completed in Aug	29,400.00	29,400.00	29,400.00
Goods transferred out in Aug	30,400.00	29,400.00	30,200.00
Inventory in process, Aug 31	1,600.00	1,600.00	960.00
Total units to be assigned costs:	32,000.00	31,000.00	31,160.00
Cost Information
Costs per equivalent unit	Total	Materials	Conversion
Total costs for Aug in Roasting Department	141,274.00	97,650.00	43,624.00
Total equivalent units		31,000.00	31,160.00
Cost per equivalent unit	4.55	3.15	1.40
Costs assigned to production:
Inventory in process, Aug 1	3,460.00	3,200.00	260.00
Costs incurred in Aug	141,274.00	97,650.00	43,624.00
Total costs accounted for by the Roasting Department	144,734.00	100,850.00	43,884.00
Costs allocated to completed and partially completed units
Inventory in process, Aug 1 balance	3,460.00	3,200.00	260.00
To complete inventory in process, Aug 1	1,120.00	-	1,120.00
Cost of completed Aug 1 work in process	4,580.00	3,200.00	1,380.00
Started and completed in Aug	133,770.00	92,610.00	41,160.00
Transferred to next Department in Aug	138,350.00
Inventory in process, Aug 31	6,384.00	5,040.00	1,344.00
Total costs assigned by the Roasting Department	144,734.00
Answer b
Calculation of beginning Costs per equivalent unit	Physical Units	Materials	Conversion
Inventory in process Aug 1	1,000.00	1,000.00	200.00
Costs		3,200.00	260.00
Beginning Costs per equivalent unit		3.20	1.30

Materials	Amount $
Beginning Costs per equivalent unit	3.20
Costs per equivalent unit for Aug	3.15
Decrease by	(0.05)
Conversion	Amount $
Beginning Costs per equivalent unit	1.30
Costs per equivalent unit for Aug	1.40
Increase by	0.10