Question

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

Work in process, December 1, 10,400 units, 75% completed		$107,380*
*Direct materials (10,400 × $8)	$83,200
Conversion (10,400 × 75% × $3.1)	24,180
	$107,380
Materials added during December from Weaving Department, 160,000 units		$1,288,000
Direct labor for December		210,803
Factory overhead for December		257,647
Goods finished during December (includes goods in process, December 1), 161,800 units		—
Work in process, December 31, 8,600 units, 25% 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 unitcomputations, round your answers to two decimal places.

Tangu Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31, 2016
Unit Information
Units charged to production:
Inventory in process, December 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, December 1
Started and completed in December
Transferred to finished goods in December
Inventory in process, December 31
Total units to be assigned cost
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for December in Cutting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			$
Costs incurred in December
Total costs accounted for by the Cutting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, December 1 balance			$
To complete inventory in process, December 1		$
Cost of completed December 1 work in process			$
Started and completed in December	$
Transferred to finished goods in December			$
Inventory in process, December 31
Total costs assigned by the Cutting Department			$

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). 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		$ The Cutting Department of Tangu Carpet Company provides the following data for December 2016. Assume that all materials are added at the beginning of the process. Work in process, December 1, 10,400 units, 75% completed $107,380*     *Direct materials (10,400 × $8) $83,200     Conversion (10,400 × 75% × $3.1) 24,180 $107,380 Materials added during December from Weaving Department, 160,000 units $1,288,000 Direct labor for December 210,803 Factory overhead for December 257,647 Goods finished during December (includes goods in process, December 1), 161,800 units — Work in process, December 31, 8,600 units, 25% 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 unitcomputations, round your answers to two decimal places. Tangu Carpet Company Cost of Production Report-Cutting Department For the Month Ended December 31, 2016 Unit Information Units charged to production: Inventory in process, December 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, December 1 Started and completed in December Transferred to finished goods in December Inventory in process, December 31 Total units to be assigned cost Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for December in Cutting Department $ $ Total equivalent units Cost per equivalent unit $ $ Costs assigned to production: Direct Materials Conversion Total Inventory in process, December 1 $ Costs incurred in December Total costs accounted for by the Cutting Department $ Costs allocated to completed and partially completed units: Inventory in process, December 1 balance $ To complete inventory in process, December 1 $ Cost of completed December 1 work in process $ Started and completed in December $ Transferred to finished goods in December $ Inventory in process, December 31 Total costs assigned by the Cutting Department $ b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). 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 $

Answer 1

Tangu Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31
Unit Information
Units charged to production:
Inventory in process, December 1			10400
Received from Weaving Department			160000
Total units accounted for by the Cutting Department			170400
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, December 1	10400	0	2600
Started and completed in December	151400	151400	151400
Transferred to finished goods in December	161800	151400	154000
Inventory in process, December 31	8600	8600	2150
Total units to be assigned costs	170400	160000	156150
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for December in Cutting Department		1288000	468450
Total equivalent units		160000	156150
Cost per equivalent unit		8.05	3.00
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			107380
Costs incurred in December			1756450
Total costs accounted for by the Cutting Department			1863830
Cost allocated to completed and partially completed units:
Inventory in process, December 1 balance			107380
To complete inventory in process, December 1	0	7800	7800
Cost of completed December 1 work in process			115180
Started and completed in December	1218770	454200	1672970
Transferred to finished goods in December			1788150
Inventory in process, December 31	69230	6450	75680
Total costs assigned by the Cutting Department			1863830
b
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.05	=8.05-8
Change in conversion cost per equivalent unit	Decrease	0.10	=3.1-3