Organic Dairy produces an organic butter that is sold by the pound. The production of the butter begins in the Churning Department.

Units in beginning Work in Process (WIP) inventory	75,000 units
Units started during the month (all direct materials, including cream
and salt, are added at the beginning of the churning process)	1,800,000 units
Units in ending Work in Process (WIP) inventory (50% of the way
through the process)	210,000 units
Cost information is as follows:
WIP - Churning Department balance as of January 1:
Direct material cost included in beginning WIP balance	292,500
Conversion cost included in beginning WIP balance	98,600
Beginning balance, WIP, January 1	$391,100
Manufacturing costs incurred during January:
Direct materials used	$1,770,000
Direct labor	9,000
Manufacturing overhead	565,000
Total manufacturing costs entered into production during January	$2,344,000

Requirement 1. Prepare a production cost report for

JanuaryJanuary

for the Churning Department.

Prepare a production cost report for the Churning Department, one section at a time. (For entries with a $0 balance, make sure to enter "0" in the appropriate cell(s). Round cost per equivalent unit amounts to the nearest cent, $X.XX.)

Organic Dairy Churning Department
Month Ended January 31
Production Cost Report
	Flow of	Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Units to account for:
Beginning work in process, January 1	75000
Plus: Started in production during January	1800000
Total physical units to account for	1875000
Units accounted for:
Completed and transferred out	210000
Plus: Ending work in process, January 31
Total physical units accounted for
Total equivalent units

	Direct	Conversion
Total Costs to Account for and Cost per Equivalent Unit	Materials	Costs
Beginning work in process
Plus: Costs added during January
Total costs to account for
Divided by: Total equivalent units
Cost per equivalent unit

		Direct	Conversion
	Assignment of total costs:	Materials	Costs	Total
	Completed and transferred out:
	Equivalent units completed and transferred out
	Multiplied by: Cost per equivalent unit
	Costs assigned to units completed and transferred out

	Ending work in process:
	Equivalent units in ending work in process, January 31
	Multiplied by: Cost per equivalent unit
	Costs assigned to units in ending work in process, January 31
	Total costs accounted for

Requirement 2. How much did it cost to make one pound of butter in the Churning Department? (Round all amounts to the nearest cent, $X.XX.)

Direct material cost
Conversion cost
Total cost

Requirement 3. How much did it cost to make a partially completed pound of butter in the Churning Department? Does this make sense? Why or why not?

How much did it cost to make a partially completed pound of butter in the Churning Department? (Round all amounts to the nearest cent, $X.XX.)

Direct material cost
Conversion cost
Total cost

Does this make sense? Why or why not?

No, this does not make sense

because

% of the

have not yet been added.