Cost of Production Report

The Cutting Department of Tangu Carpet Company provides the following data for December 2016. Assume that all materials are added at the beginning of the process.

Work in process, December 1, 11,200 units, 75% completed		$122,360*
*Direct materials (11,200 $7.4)	$82,880
Conversion (11,200 75% $4.7)	39,480
	$122,360
Materials added during December from Weaving Department, 172,400 units		$1,301,620
Direct labor for December		366,509
Factory overhead for December		447,955
Goods finished during December (includes goods in process, December 1), 174,400 units
Work in process, December 31, 9,200 units, 40% 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.

Tangu Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31, 2016
Unit Information
Units charged to production:
Inventory in process, December 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, December 1
Started and completed in December
Transferred to finished goods in December
Inventory in process, December 31
Total units to be assigned cost
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for December in Cutting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			$
Costs incurred in December
Total costs accounted for by the Cutting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, December 1 balance			$
To complete inventory in process, December 1		$
Cost of completed December 1 work in process			$
Started and completed in December	$
Transferred to finished goods in December			$
Inventory in process, December 31
Total costs assigned by the Cutting Department			$

Feedback

a. How much more (percentage amount) needed to be done to the beginning work in process units to make the units to complete to transfer to the next department? Did these units require more material cost or more conversion cost? How much, in terms of cost, had been done to these units in the prior period? In order for units to be transferred to the next department, the units have to be complete with respect to both materials and conversion. When are materials added in the process? How complete are the units in ending inventory with respect to materials? How compete are the units in ending inventory with respect to conversion? Materials and conversion cost needs to be allocated among the equivalent units. Are the number of equivalent units the same for materials and conversion?

Learning Objective 2, Learning Objective 4.

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

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

Feedback

b. Compare the costs per equivalent unit for November and December. The November costs per equivalent unit for materials and conversion are in the December 1 work in process inventory.

Learning Objective 2, Learning Objective 4.

Feedback