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 Process$$Filling was as follows on January $1$:

Work in Process$$Filling Department

$(2,800$ units, $70\%$ completed$)$:

Line Item Description Amount

Direct materials $(2,800\backslash$times $$13\mathrm{.}20)$ $$36,960$

Conversion $(2,800\backslash$times $70\%\backslash$times $$8\mathrm{.}50)16,660$

Total $$53,620$

The following costs were charged to Work in Process$$Filling during January:

Direct materials transferred from Reaction

Line Item Description Amount

Department: $36,100$ units at $$12\mathrm{.}90$ a unit $$465,690$

Direct labor $166,260$

Factory overhead $159,747$

During January, $35,800$ units of specialty chemicals were completed. Work in Process$$Filling Department on January $31$ was $3,100$ units, $90\%$ completed.

Required:

Question Content Area

$1.$ 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 the nearest cent.

Dover Chemical Company

Cost of Production Report$$Filling Department

For the Month Ended January $31$

Units Whole Units Equivalent Units

Direct Materials Equivalent Units

Conversion

Units charged to production:

Inventory in process, January $1$ fill in the blank $1$ of $40$

Received from Reaction Department fill in the blank $2$ of $40$

Total units accounted for by the Filling Department fill in the blank $3$ of $40$

Costs charged to production:

Inventory in process, January $1$ fill in the blank $4$ of $40$

fill in the blank $5$ of $40$

fill in the blank $6$ of $40$

Started and completed in January fill in the blank $7$ of $40$

fill in the blank $8$ of $40$

fill in the blank $9$ of $40$

Transferred to finished goods in January fill in the blank $10$ of $40$

fill in the blank $11$ of $40$

fill in the blank $12$ of $40$

Inventory in process, January $31$ fill in the blank $13$ of $40$

fill in the blank $14$ of $40$

fill in the blank $15$ of $40$

Total units to be assigned costs fill in the blank $16$ of $40$

fill in the blank $17$ of $40$

fill in the blank $18$ of $40$

Costs

Costs Direct Materials Conversion Total

Cost per equivalent unit:

Total costs for January in Filling Department fill in the blank $19$ of $40$$

fill in the blank $20$ of $40$$

Total equivalent units fill in the blank $21$ of $40$

fill in the blank $22$ of $40$

Cost per equivalent unit fill in the blank $23$ of $40$$

fill in the blank $24$ of $40$$

Costs assigned to production:

Inventory in process, January $1$ fill in the blank $25$ of $40$$

Costs incurred in January fill in the blank $26$ of $40$

Total costs accounted for by the Filling Department fill in the blank $27$ of $40$$

Costs allocated to completed and partially completed units:

Inventory in process, January $1$ balance fill in the blank $28$ of $40$$

To complete inventory in process, January $1$ fill in the blank $29$ of $40$$

fill in the blank $30$ of $40$$

fill in the blank $31$ of $40$

Cost of completed January $1$ work in process fill in the blank $32$ of $40$$

Started and completed in January fill in the blank $33$ of $40$

fill in the blank $34$ of $40$

fill in the blank $35$ of $40$

Transferred to finished goods in January fill in the blank $36$ of $40$$

Inventory in process, January $31$ fill in the blank $37$ of $40$

fill in the blank $38$ of $40$

fill in the blank $39$ of $40$

Total costs assigned by the Filling Department fill in the blank $40$ of $40$$

Question Content Area

$2.$ 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.

TransactionAccountDebitCredit

$(1)$

$(2)$

Question Content Area

$3.$ 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 fill in the blank $1$ of $4$

fill in the blank $2$ of $4$$

Change in conversion cost per equivalent unit fill in the blank $3$ of $4$

fill in the blank $4$ of $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

and

$.$ 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.