Question

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, 900 pounds, 50% completed $4,635* *Direct materials (900 X $4.3) $3,870 Conversion (900 X 50% X $1.7) $765 $4,635 Coffee beans added during August, 28,000 pounds 119,000 Conversion costs during August 50,454 Work in process, August 31, 1,400 pounds, 70% completed ? Goods finished during August, 27,500 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

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			900
Received from materials storeroom			28000
Total units accounted for by the Roasting Department			28900
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	900	0	450
Started and completed in August	26600	26600	26600
Transferred to finished goods in August	27500	26600	27050
Inventory in process, August 31	1400	1400	980
Total units to be assigned costs	28900	28000	28030
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		119000	50454
Total equivalent units		28000	28030
Cost per equivalent unit		4.25	1.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			4635
Costs incurred in August			169454
Total costs accounted for by the Roasting Department			174089
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			4635
To complete inventory in process, August 1	0	810	810
Cost of completed August 1 work in process			5445
Started and completed in August	113050	47880	160930
Transferred to finished goods in August (			166375
Inventory in process, August 31	5950	1764	7714
Total costs assigned by the Roasting Department			174089
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=4.3-4.25
Change in conversion cost per equivalent unit	Increase	0.10	=1.8-1.7