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, 8,000 units, 80% completed		$93,760*
   *Direct materials (8,000 $7.40)	$59,200
   Conversion (8,000 80% $5.40)	34,560
   	$93,760
   Materials added during January from Weaving Department, 123,200 units		$917,840
   Direct labor for January		285,842
   Factory overhead for January		349,363
   Goods finished during January (includes goods in process, January 1), 124,600 units
   Work in process, January 31, 6,600 units, 25% 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 cost
   Cost Information
   Cost 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
   Costs 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