Question
Cost of Production Report The debits to Work in ProcessRoasting Department for Morning Brew Coffee Company for August 2016, together with information concerning production, are
Cost of Production Report
The debits to Work in ProcessRoasting Department for Morning Brew Coffee Company for August 2016, together with information concerning production, are as follows:
Work in process, August 1, 700 pounds, 20% completed | $ 3,479* | |||
*Direct materials (700 X $4.70) | $3,290 | |||
Conversion (700 X 20% X $1.35) | 189 | |||
$3,479 | ||||
Coffee beans added during August, 14,300 pounds | 65,780 | |||
Conversion costs during August | 21,942 | |||
Work in process, August 31, 400 pounds, 42% completed | ? | |||
Goods finished during August, 14,600 pounds | ? |
Part A: Cost of Production Report
All direct materials are placed in process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
Direct materials and conversion equivalent units of production for August.
Direct materials and conversion costs per equivalent unit for August.
Cost of goods finished during August.
Cost of work in process at August 31, 2016.
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to the nearest cent.
Morning Brew Coffee Company | |||
Cost of Production ReportRoasting Department | |||
For the Month Ended August 31, 2016 | |||
Unit Information | |||
Units charged to production: | |||
Inventory in process, August 1 | |||
Received from materials storeroom | |||
Total units accounted for by the Roasting Department | |||
Units to be assigned costs: | |||
Equivalent Units | |||
Whole Units | Direct Materials (1) | Conversion (1) | |
Inventory in process, August 1 | |||
Started and completed in August | |||
Transferred to finished goods in August | |||
Inventory in process, August 31 | |||
Total units to be assigned costs | |||
Cost Information | |||
Costs per equivalent unit: | |||
Direct Materials | Conversion | ||
Total costs for August in Roasting Department | $ | $ | |
Total equivalent units | |||
Cost per equivalent unit (2) | $ | $ | |
Costs assigned to production: | |||
Direct Materials | Conversion | Total | |
Inventory in process, August 1 | $ | ||
Costs incurred in August | |||
Total costs accounted for by the Roasting Department | $ | ||
Costs allocated to completed and partially completed units: | |||
Inventory in process, August 1 balance | $ | ||
To complete inventory in process, August 1 | $ | $ | |
Cost of completed August 1 work in process | $ | ||
Started and completed in August | |||
Transferred to finished goods in August (3) | $ | ||
Inventory in process, August 31 (4) | |||
Total costs assigned by the Roasting Department | $ | ||
Feedback
a. How much more (percentage amount) needed to be done to the beginning work in process units to make the units 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 complete 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.
Part B: Additional Computations
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 two decimal places.
Increase or Decrease | Amount | |
Change in direct materials cost per equivalent unit | Decrease | $ |
Change in conversion cost per equivalent unit | Increase | $ |
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