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
(2,100 units, 40% completed):
	Direct materials (2,100 x $10.50)	$22,050
	Conversion (2,100 x 40% x $6.70)	5,628
		$27,678

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

Direct materials transferred from Reaction
	Department: 27,100 units at $10.20 a unit	$276,420
Direct labor		101,860
Factory overhead		97,863

During January, 26,900 units of specialty chemicals were completed. Work in ProcessFilling Department on January 31 was 2,300 units, 90% completed.

Required:

Question Content Area

1. Prepare a cost of production report for the Filling Department for January. If an amount box does not require an entry, leave it blank. If required, round your cost per equivalent unit answers to two decimal places.

Dover Chemical Company

Cost of Production Report-Filling Department

For the Month Ended January 31

Unit Information

Units charged to production:		Number of Units
Inventory in process, January 1
Received from Reaction Department
Total units accounted for by the Filling 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 Filling Department
Total equivalent units
Cost per equivalent unit
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1
Costs incurred in January
Total costs accounted for by the Filling 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 Filling Department

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

(1)	Factory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department	- Select -	- Select -
	Factory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department	- Select -	- Select -
(2)	Factory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department	- Select -	- Select -
	Factory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department	- Select -	- Select -

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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.

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

4. The cost of production report may be used as the basis for allocating product costs between

Work in ProcessDirect Materials

and

Cost of Goods SoldFinished Goods

. The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.