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:

Line Item Description	Amount
Direct materials (2,800 $13.30)	$37,240
Conversion (2,800 60% $8.60)	14,448
Total	$51,688

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

Line Item Description	Amount
Department: 36,100 units at $13.00 a unit	$469,300
Direct labor	156,280
Factory overhead	150,147

During January, 35,800 units of specialty chemicals were completed. Work in ProcessFilling Department on January 31 was 3,100 units, 10% completed.

Required:

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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.

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	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$

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

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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.

Line Item Description	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	fill in the blank 1 of 4 DecreaseIncrease	fill in the blank 2 of 4$
Change in conversion cost per equivalent unit	fill in the blank 3 of 4 DecreaseIncrease	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

Direct MaterialsWork in Process

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.