Cost of production report OBJ. 2, 4 The Cutting Department of Karachi Carpet Company provides the following data for January 2016. Assume that all materials are added at the beginning of the process.

Work in process, January 1, 1,400 units, 75% completed $ 22,960*

*Direct materials (1,400 × $12.65) $17,710 Conversion (1,400 × 75% × $5.00) 5,250

$22,960 Materials added during January from Weaving Department, 58,000 units $742,400 Direct labor for January 134,550 Factory overhead for January 151,611 Goods finished during January (includes goods in process, January 1), 56,200 units —

Work in process, January 31, 3,200 units, 30% completed —

a. Prepare a cost of production report for the Cutting Department.

b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December).