The Cutting Department of Karachi Carpet Company provides the following data for January 2016. Assume that all materials are added at the beginning of the process.

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).

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Work in process, January 1, 1,400 units, 75% completed 22,960 $17,710 5,250 $22,960 *Direct materials (1,400 x $12.65) Conversion (1,400 x 75%x $5.00) Materials added during January from Weaving Department, 58,000 units Direct labor for January Factory overhead for January Goods finished during January (includes goods in process, January 1), 56,200 units Work in process, January 31, 3,200 units, 30% completed $742,400 134,550 51,611