Question

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

ACCOUNT Work in Process—Baking Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 9,300 units, 4/5 completed					16,182
	31	Direct materials, 167,400 units	217,620				233,802
	31	Direct labor	63,340				297,142
	31	Factory overhead	35,624				332,766
	31	Goods finished, 169,500 units			321,678		11,088
	31	Bal. ? units, 2/5 completed					11,088

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

1. Direct materials cost per equivalent unit.	$
2. Conversion cost per equivalent unit.	$
3. Cost of the beginning work in process completed during March.	$
4. Cost of units started and completed during March.	$
5. Cost of the ending work in process.	$

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

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The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 400 pounds, 50% completed				$1,680*
	*Direct materials (400 X $3.5)	$1,400
	Conversion (400 X 50% X $1.4)	$280
		$1,680
Coffee beans added during August, 13,000 pounds				44,850
Conversion costs during August				19,275
Work in process, August 31, 700 pounds, 50% completed				?
Goods finished during August, 12,700 pounds				?

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

Direct materials and conversion equivalent units of production for August.

Direct materials and conversion costs per equivalent unit for August.

Cost of goods finished during August.

Cost of work in process at August 31.

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1
Received from materials storeroom
Total units accounted for by the Roasting Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1
Started and completed in August
Transferred to finished goods in August
Inventory in process, August 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit (2)		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$
Costs incurred in August
Total costs accounted for by the Roasting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$
To complete inventory in process, August 1	$	$
Cost of completed August 1 work in process			$
Started and completed in August
Transferred to finished goods in August (3)			$
Inventory in process, August 31 (4)
Total costs assigned by the Roasting Department			$

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). 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		$

Answer 1

		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	9300	0	1860
Started and completed in March	160200	160200	160200
Transferred to Packing Department in March	169500	160200	162060
Inventory in process, March 31	7200	7200	2880
Total units to be assigned costs	176700	167400	164940
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Baking Department		217620	98964
Total equivalent units		167400	164940
Cost per equivalent unit		1.30	0.60
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			16182
Costs incurred in March			316584
Total costs accounted for by the Baking Department			332766
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			16182
To complete inventory in process, March 1	0	1116	1116
Cost of completed March 1 work in process			17298
Started and completed in March	208260	96120	304380
Transferred to Packing Department in March			321678
Inventory in process, March 31	9360	1728	11088
Total costs assigned by the Baking Department			332766
a
1. Direct materials cost per equivalent unit $1.3
2. Conversion cost per equivalent unit $0.6
3. Cost of the beginning work in process completed during March $17298
4. Cost of units started and completed during March $304380
5. Cost of the ending work in process $11088
b
Conversion cost in beginning inventory=16182-(9300*1.3)= 4092
Conversion cost per equivalent unit =4092/(9300*4/5)= $0.55
Conversion cost per equivalent unit increase

Part-2

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1			400
Received from materials storeroom			13000
Total units accounted for by the Roasting Department			13400
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	400	0	200
Started and completed in August	12300	12300	12300
Transferred to finished goods in August	12700	12300	12500
Inventory in process, August 31	700	700	350
Total units to be assigned costs	13400	13000	12850
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		44850	19275
Total equivalent units		13000	12850
Cost per equivalent unit		3.45	1.50
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			1680
Costs incurred in August			64125
Total costs accounted for by the Roasting Department			65805
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			1680
To complete inventory in process, August 1	0	300	300
Cost of completed August 1 work in process			1980
Started and completed in August	42435	18450	60885
Transferred to Packing Department in August			62865
Inventory in process, August 31	2415	525	2940
Total costs assigned by the Roasting Department			65805
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=3.45-3.50
Change in conversion cost per equivalent unit	Increase	0.10	=1.5-1.4