Cost of Production Report
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, 13,600 units, 60% completed | $155,856* | |
| *Direct materials (13,600 × $8.4) | $114,240 | |
| Conversion (13,600 × 60% × $5.1) | 41,616 | |
| $155,856 | ||
| Materials added during January from Weaving Department, 209,600 units | $1,781,600 | |
| Direct labor for January | 469,980 | |
| Factory overhead for January | 574,420 | |
| Goods finished during January (includes goods in process, January 1), 212,000 units | — | |
| Work in process, January 31, 11,200 units, 45% completed | — |
a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.
| Karachi Carpet Company | |||
| Cost of Production Report-Cutting Department | |||
| For the Month Ended January 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, January 1 | |||
| Received from Weaving Department | |||
| Total units accounted for by the Cutting Department | |||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials | Conversion | |
| Inventory in process, January 1 | |||
| Started and completed in January | |||
| Transferred to finished goods in January | |||
| Inventory in process, January 31 | |||
| Total units to be assigned costs | |||
| Cost Information | |||
| Costs per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for January in Cutting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit | $ | $ | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, January 1 | $ | ||
| Costs incurred in January | |||
| Total costs accounted for by the Cutting Department | $ | ||
| Cost allocated to completed and partially completed units: | |||
| Inventory in process, January 1 balance | $ | ||
| To complete inventory in process, January 1 | $ | ||
| Cost of completed January 1 work in process | $ | ||
| Started and completed in January | $ | ||
| Transferred to finished goods in January | $ | ||
| Inventory in process, January 31 | |||
| Total costs assigned by 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). If required, round your answers to two decimal places.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | $ | |
| Change in conversion cost per equivalent unit |
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|
SUMMARY OUTPUT |
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|
Regression Statistics |
||||||||
|
Multiple R |
0.908881 |
|||||||
|
R Square |
0.894012 |
|||||||
|
Standard Error |
752.6137 |
|||||||
|
Observations |
28 |
|||||||
|
ANOVA |
||||||||
|
df |
SS |
MS |
F |
Significance F |
||||
|
Regression |
1 |
69942828 |
69942828 |
123.4807 |
2.26E-11 |
|||
|
Residual |
26 |
14727112 |
566427.4 |
|||||
|
Total |
27 |
84669940 |
||||||
|
Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
Lower 95.0% |
Upper 95.0% |
|
|
Intercept |
980.635 |
435.8579 |
2.892274 |
0.007632 |
364.7019 |
2156.539 |
364.7019 |
2156.539 |
|
Machine Hours |
17.360 |
1.339521 |
11.11219 |
2.26E-11 |
12.13158 |
17.63842 |
12.13158 |
17.63842 |
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