Equivalent Units and Related Costs; Cost of Production Report; Entries

Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.

The balance in the account Work in ProcessFilling was as follows on January 1:

Work in ProcessFilling Department (5,000 units, 40% completed):

Direct materials (5,000 $12.40) $62,000

Conversion (5,000 40% $8.10) 16,200

Total $78,200

The following costs were charged to Work in ProcessFilling during January:

Direct materials transferred from Reaction

Department: 64,500 units at $12.20 a unit	$786,900
Direct labor	275,620
Factory overhead	264810

During January, 63,900 units of specialty chemicals were completed. Work in ProcessFilling Department on January 31 was 5,600 units, 30% completed.

1. Prepare a cost of production report for the Filling Department for January.

Dover Chemical Company Cost of Production ReportFilling Department For the Month Ended January 31

Units	Whole Units	Equivalent Units	Direct MaterialsEquivalent Units
Units charged to production:
Inventory in process, January 1
Received from Reaction Department
Total units accounted for by the Filling Department
Costs charged to production:
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

Costs

Costs	Direct Materials	Conversion	Total
Cost per equivalent unit:
Total costs for January in Filling Department	$	$
Total equivalent units
Cost per equivalent unit	$	$
Costs assigned to production:
Inventory in process, January 1			$
Costs incurred in January
Total costs accounted for by the Filling 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 Filling Department			$

2.

Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods. If an amount box does not require an entry, leave it blank.

Transaction	Account	Debit	Credit
(1)	Work in Process-Filling Department
	Work in Process-Reaction Department
(2)	Finished Goods
	Work in Process-Filling Department

3.

Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places.

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