The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.

Work in process, January 1, 1,400 units, 75% completed $ 22,960*

*Direct materials (1,400 $12.65) $ 17,710

Conversion (1,400 75% $5.00) $ 5,250

Total $ 22,960

Materials added during January from Weaving Department, 58,000 units $ 742,400

Direct labor for January $ 134,550

Factory overhead for January $ 151,611

Goods finished during January (includes goods in process, January 1), 56,200 units

Work in process, January 31, 3,200 units, 30% completed

A. Prepare a cost of production report for the Cutting Department.

B. Compute and evaluate the change in the costs per equivalent unit for direct materials and

conversion from the previous month (December).