1. Cost of Production Report

The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.

Work in process, January 1, 12,800 units, 55% completed		$142,528*
*Direct materials (12,800 $8)	$102,400
Conversion (12,800 55% $5.7)	40,128
	$142,528
Materials added during January from Weaving Department, 197,200 units		$1,587,460
Direct labor for January		494,424
Factory overhead for January		604,296
Goods finished during January (includes goods in process, January 1), 199,600 units
Work in process, January 31, 10,400 units, 35% completed

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.

Karachi Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended January 31
Unit Information
Units charged to production:
Inventory in process, January 1
Received from Weaving Department
Total units accounted for by the Cutting Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, January 1
Started and completed in January
Transferred to finished goods in January
Inventory in process, January 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for January in Cutting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			$
Costs incurred in January
Total costs accounted for by the Cutting Department			$
Cost allocated to completed and partially completed units:
Inventory in process, January 1 balance			$
To complete inventory in process, January 1		$
Cost of completed January 1 work in process			$
Started and completed in January	$
Transferred to finished goods in January			$
Inventory in process, January 31
Total costs assigned by 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). If required, round your answers to two decimal places.

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

2. Cost of Production and Journal Entries

AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 1,100 pounds of alloy in process, which were 40% complete as to conversion. The Work in Process balance for these 1,100 pounds was $125,840, determined as follows:

Direct materials (1,100 x $110)	$121,000
Conversion (1,100 x 40% x $11)	4,840
	$125,840

During May, the Casting Department was charged $1,091,800 for 10,300 pounds of alloy and $41,880 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 10,700 pounds of finished castings to the Machining Department. The May 31 inventory in process was 30% complete as to conversion.

a1. Prepare the May journal entry for the Casting Department for the materials charged to production.

a2. Prepare the May journal entry for the Casting Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank.

a3. Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department.

b. Determine the Work in ProcessCasting Department May 31 balance. $

c. Compute the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).

	Cost per Equivalent Unit
Change in materials		$
Change in conversion