Question

enus Chocolate Company processes chocolate into candy bars. The process begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Department. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the Molding Department, where the milk chocolate is formed into candy bars. The following is a partial work in process account of the Blending Department at March 31, 2016:

ACCOUNT Work in Process—Blending Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 5,400 units, 1/5 completed					17,712
	31	Direct materials, 216,000 units	691,200				708,912
	31	Direct labor	138,800				847,712
	31	Factory overhead	34,640				882,352
	31	Goods transferred, 217,000 units			?
	31	Bal., ? units, 1/5 completed					?

Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Blending Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.

Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31, 2016
Unit Information
Units charged to production:
Inventory in process, March 1
Received from materials storeroom
Total units accounted for by the Blending Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1
Started and completed in March
Transferred to Molding Department in March
Inventory in process, March 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Blending Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			$
Costs incurred in March
Total costs accounted for by the Blending Department			$
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			$
To complete inventory in process, March 1	$	$
Cost of completed March 1 work in process			$
Started and completed in March
Transferred to Molding Department in March			$
Inventory in process, March 31
Total costs assigned by the Blending Department			$

Feedback

1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

Learning Objective 2, Learning Objective 4.

2. Assuming that the March 1 work in process inventory includes $16,740 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March. If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$
Change in conversion cost per equivalent unit		$

Feedback

Answer 1

Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31
Unit Information
Units charged to production:
Inventory in process, March 1			5400
Received from materials storeroom			216000
Total units accounted for by the Blending Department			221400
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	5400	0	4320
Started and completed in March	211600	211600	211600
Transferred to Molding Department in March	217000	211600	215920
Inventory in process, March 31	4400	4400	880
Total units to be assigned costs	221400	216000	216800
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Blending Department		691200	173440
Total equivalent units		216000	216800
Cost per equivalent unit		3.20	0.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			121800
Costs incurred in March			864640
Total costs accounted for by the Blending Department			986440
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			121800
To complete inventory in process, March 1	0	3456	3456
Cost of completed March 1 work in process			125256
Started and completed in March	677120	169280	846400
Transferred to Molding Department in March			971656
Inventory in process, March 31	14080	704	14784
Total costs assigned by the Blending Department			986440
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.10	=3.2-(16740/5400)
Change in conversion cost per equivalent unit	Decrease	0.10	=0.8-((17712-5400*3.1)/(5400*1/5))