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
(5,500 units, 30% completed):
	Direct materials (5,500 x $15.20)	$83,600
	Conversion (5,500 x 30% x $9.90)	16,335
		$99,935

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

Direct materials transferred from Reaction
	Department: 71,000 units at $15.00 a unit	$1,065,000
Direct labor		360,810
Factory overhead		346,662

During January, 70,400 units of specialty chemicals were completed. Work in ProcessFilling Department on January 31 was 6,100 units, 10% 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		fill in the blank b10a5507dff6fec_1
Received from Reaction Department		fill in the blank b10a5507dff6fec_2
Total units accounted for by the Filling Department		fill in the blank b10a5507dff6fec_3

Units to be assigned costs:	Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, January 1	fill in the blank b10a5507dff6fec_4	fill in the blank b10a5507dff6fec_5	fill in the blank b10a5507dff6fec_6
Started and completed in January	fill in the blank b10a5507dff6fec_7	fill in the blank b10a5507dff6fec_8	fill in the blank b10a5507dff6fec_9
Transferred to finished goods in January	fill in the blank b10a5507dff6fec_10	fill in the blank b10a5507dff6fec_11	fill in the blank b10a5507dff6fec_12
Inventory in process, January 31	fill in the blank b10a5507dff6fec_13	fill in the blank b10a5507dff6fec_14	fill in the blank b10a5507dff6fec_15
Total units to be assigned costs	fill in the blank b10a5507dff6fec_16	fill in the blank b10a5507dff6fec_17	fill in the blank b10a5507dff6fec_18

Cost Information

Costs per equivalent unit:	Direct Materials	Conversion
Total costs for January in Filling Department	$fill in the blank b10a5507dff6fec_19	$fill in the blank b10a5507dff6fec_20
Total equivalent units	fill in the blank b10a5507dff6fec_21	fill in the blank b10a5507dff6fec_22
Cost per equivalent unit	$fill in the blank b10a5507dff6fec_23	$fill in the blank b10a5507dff6fec_24
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			$fill in the blank b10a5507dff6fec_25
Costs incurred in January			fill in the blank b10a5507dff6fec_26
Total costs accounted for by the Filling Department			$fill in the blank b10a5507dff6fec_27
Cost allocated to completed and partially completed units:
Inventory in process, January 1 balance			$fill in the blank b10a5507dff6fec_28
To complete inventory in process, January 1	$fill in the blank b10a5507dff6fec_29	$fill in the blank b10a5507dff6fec_30	fill in the blank b10a5507dff6fec_31
Cost of completed January 1 work in process			$fill in the blank b10a5507dff6fec_32
Started and completed in January	fill in the blank b10a5507dff6fec_33	fill in the blank b10a5507dff6fec_34	fill in the blank b10a5507dff6fec_35
Transferred to finished goods in January			$fill in the blank b10a5507dff6fec_36
Inventory in process, January 31	fill in the blank b10a5507dff6fec_37	fill in the blank b10a5507dff6fec_38	fill in the blank b10a5507dff6fec_39
Total costs assigned by the Filling Department			$fill in the blank b10a5507dff6fec_40

Question Content Area

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 -

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.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	DecreaseIncrease	$fill in the blank e6c558fc1031051_2
Change in conversion cost per equivalent unit	DecreaseIncrease	fill in the blank e6c558fc1031051_4

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.