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, 40% completed				$4,086*
	*Direct materials (900 X $3.9)	$3,510
	Conversion (900 X 40% X $1.6)	$576
		$4,086
Coffee beans added during August, 28,000 pounds				107,800
Conversion costs during August				47,090
Work in process, August 31, 1,400 pounds, 40% 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:

1. Direct materials and conversion equivalent units of production for August
2. Direct materials and conversion costs per equivalent unit for August
3. Cost of goods finished during August
4. 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

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	540
Started and completed in August	26600	26600	26600
Transferred to finished goods in August	27500	26600	27140
Inventory in process, August 31	1400	1400	560
Total units to be assigned costs	28900	28000	27700
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		107800	47090
Total equivalent units		28000	27700
Cost per equivalent unit		3.85	1.70
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			4086
Costs incurred in August			154890
Total costs accounted for by the Roasting Department			158976
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			4086
To complete inventory in process, August 1	0	(540*1.7) 918	918
Cost of completed August 1 work in process			5004
Started and completed in August	(26600*3.85) 102410	(26600*1.71) 45220	147630
Transferred to finished goods in August (			152634
Inventory in process, August 31	(1400*3.85)5390	(560*1.70) 952	6342
Total costs assigned by the Roasting Department			158976
ANSWER: 2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=3.9 - 3.85
Change in conversion cost per equivalent unit	Increase	0.10	=1.6 - 1.70