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
(2,200 units, 70% completed):
	Direct materials (2,200 x $16.1)	$35,420
	Conversion (2,200 x 70% x $10.5)	16,170
	$51,590

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

Direct materials transferred from Reaction
	Department: 28,400 units at $15.9 a unit	$451,560
Direct labor	152,030
Factory overhead	146,072

During January, 28,200 units of specialty chemicals were completed. Work in ProcessFilling Department on January 31 was 2,400 units, 50% completed.

Required:

1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". 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:
Inventory in process, January 1	fill in the blank 6f7c23041fa5fdb_1
Received from Reaction Department	fill in the blank 6f7c23041fa5fdb_2
Total units accounted for by the Filling Department	fill in the blank 6f7c23041fa5fdb_3
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, January 1	fill in the blank 6f7c23041fa5fdb_4	fill in the blank 6f7c23041fa5fdb_5	fill in the blank 6f7c23041fa5fdb_6
Started and completed in January	fill in the blank 6f7c23041fa5fdb_7	fill in the blank 6f7c23041fa5fdb_8	fill in the blank 6f7c23041fa5fdb_9
Transferred to finished goods in January	fill in the blank 6f7c23041fa5fdb_10	fill in the blank 6f7c23041fa5fdb_11	fill in the blank 6f7c23041fa5fdb_12
Inventory in process, January 31	fill in the blank 6f7c23041fa5fdb_13	fill in the blank 6f7c23041fa5fdb_14	fill in the blank 6f7c23041fa5fdb_15
Total units to be assigned costs	fill in the blank 6f7c23041fa5fdb_16	fill in the blank 6f7c23041fa5fdb_17	fill in the blank 6f7c23041fa5fdb_18
Cost Information
Cost per equivalent unit:
	Direct Materials	Conversion
Total costs for January in Filling Department	$fill in the blank 6f7c23041fa5fdb_19	$fill in the blank 6f7c23041fa5fdb_20
Total equivalent units	fill in the blank 6f7c23041fa5fdb_21	fill in the blank 6f7c23041fa5fdb_22
Cost per equivalent unit	$fill in the blank 6f7c23041fa5fdb_23	$fill in the blank 6f7c23041fa5fdb_24
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			$fill in the blank 6f7c23041fa5fdb_25
Costs incurred in January			fill in the blank 6f7c23041fa5fdb_26
Total costs accounted for by the Filling Department			$fill in the blank 6f7c23041fa5fdb_27
Costs allocated to completed and partially completed units:
Inventory in process, January 1 balance			$fill in the blank 6f7c23041fa5fdb_28
To complete inventory in process, January 1		$fill in the blank 6f7c23041fa5fdb_29	fill in the blank 6f7c23041fa5fdb_30
Cost of completed January 1 work in process			$fill in the blank 6f7c23041fa5fdb_31
Started and completed in January	$fill in the blank 6f7c23041fa5fdb_32	fill in the blank 6f7c23041fa5fdb_33	fill in the blank 6f7c23041fa5fdb_34
Transferred to finished goods in January			$fill in the blank 6f7c23041fa5fdb_35
Inventory in process, January 31	fill in the blank 6f7c23041fa5fdb_36	fill in the blank 6f7c23041fa5fdb_37	fill in the blank 6f7c23041fa5fdb_38
Total costs assigned by the Filling Department			$fill in the blank 6f7c23041fa5fdb_39

2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods.

(1)	Accounts PayableFactory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department	- Select -
	Accounts PayableFactory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department		- Select -
(2)	Cost of Goods SoldFactory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department	- Select -
	Cost of Goods SoldFactory Overhead-Filling DepartmentFinished GoodsMaterialsWork in Process-Filling DepartmentWork in Process-Reaction Department		- Select -

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	DecreaseIncrease	$fill in the blank 88b0fcf48f87079_2
Change in conversion cost per equivalent unit	DecreaseIncrease	$fill in the blank 88b0fcf48f87079_4

4. Discuss the uses of the cost of production report and the results of part (3).

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

Direct MaterialsWork in ProcessWork in Process

and

Cost of Goods SoldFinished GoodsFinished 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.