Question

Hearty Soup Co. uses a process cost system to record the costs of processing soup, which requires the cooking and filling processes. Materials are entered from the cooking process at the beginning of the filling process. The inventory of Work in Process-Filling on April 1 and debits to the account during April 2016 were as follows:

Bal., 700 units, 30% completed:
Direct materials (700 × $4.6)	$3,220
Conversion (700 × 30% × $1.75)	368
	$3,588
From Cooking Department, 7,400 units	$34,780
Direct labor	8,512
Factory overhead	2,464

During April, 700 units in process on April 1 were completed, and of the 7,400 units entering the department, all were completed except 500 units that were 90% completed.

Charges to Work in Process-Filling for May were as follows:

From Cooking Department, 9,500 units	$46,550
Direct labor	12,030
Factory overhead	2,834

During May, the units in process at the beginning of the month were completed, and of the 9,500 units entering the department, all were completed except 400 units that were 35% completed.

	Required:
1.	(a) Enter the balance as of April 1, 2016, in a four-column account for Work in Process-Filling. Record the debits and the credits in the account for April. (b) Construct a cost of production report, and present computations for determining i. equivalent units of production for materials and conversion. ii. costs per equivalent unit.* iii. cost of goods finished, differentiating between units started in the prior period and units started and finished in April.* iv. work in process inventory.* * If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent and final answers to the nearest dollar amount.
2.	(a) Provide the same information for May by recording the May transactions in the four-column work in process account. (b) Construct a cost of production report, and present the May computations (i through iv) listed in part 1(b).
3.	Comment on the change in costs per equivalent unit for March through May for direct materials and conversion costs.

Cost of Production Report- April

1(b).

Construct a cost of production report, and present computations for determining i. equivalent units of production for materials and conversion. ii. costs per equivalent unit.* iii. cost of goods finished, differentiating between units started in the prior period and units started and finished in April.* iv. work in process inventory.* * If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent and final answers to the nearest dollar amount.

HEARTY SOUP CO.
Cost of Production Report-Filling Department
For the Month Ended April 30, 2016
UNITS	Whole Units	Equivalent Units
		Direct Materials	Conversion
Units to account for during production:
Inventory in process, April 1
Received from Milling Department
Total units accounted for by the Filling Department
Units to be assigned costs:
Inventory in process, April 1 (30% completed)
Started and completed in April
Transferred to finished goods in April
Inventory in process, April 30 (90% completed)
Total units to be assigned costs

COSTS	Costs
	Direct Materials	Conversion	Total
Cost per equivalent unit:
Total production costs for April in Filling Department
Total equivalent units	÷	÷
Cost per equivalent unit
Costs assigned to production:
Inventory in process, April 1
Costs incurred in April
Total costs accounted for by the Filling Department
Cost allocated to completed and
partially completed units:
Inventory in process, April 1 balance
To complete inventory in process, April 1
Cost of completed April 1 work in process
Started and completed in April
Transferred to finished goods in April
Inventory in process, April 30
Total costs assigned by the Filling Department

Cost of Production Report- May

2(b).

Construct a cost of production report, and present computations for determining i. equivalent units of production for materials and conversion ii. costs per equivalent unit* iii. cost of goods finished, differentiating between units started in the prior period and units started and finished in April* iv. work in process inventory.* * If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent and final answers to the nearest dollar amount.

HEARTY SOUP CO.
Cost of Production Report-Filling Department
For the Month Ended May 31, 2016
UNITS	Whole Units	Equivalent Units
		Direct Materials	Conversion
Units charged to production:
Inventory in process, May 1
Received from Milling Department
Total units accounted for by the Filling Department
Units to be assigned costs:
Inventory in process, May 1 (90% completed)
Started and completed in May
Transferred to finished goods in May
Inventory in process, May 31 (35% completed)
Total units to be assigned costs

COSTS	Costs
	Direct Materials	Conversion	Total
Costs per equivalent unit:
Total costs for May in Filling Department
Total equivalent units	÷	÷
Cost per equivalent unit
Costs assigned to production:
Inventory in process, May 1
Costs incurred in May
Total costs accounted for by the Filling Department
Costs allocated to completed and
partially completed units:
Inventory in process, May 1 balance
To complete inventory in process, May 1
Cost of completed May 1 work in process
Started and completed in May
Transferred to finished goods in May
Inventory in process, May 31
Total costs assigned by the Filling Department

Final Question:

The cost per equivalent unit for direct materials (increased, decreased) from March to May. The cost per equivalent unit for conversion costs (increased, decreased) from March to May. These changes(should, need not) be investigated for their underlying causes, and any necessary corrective actions should be taken.

Answer 1

Cost of Production Report-Filling Department :

units	Whole units	Equivalent Units
		Direct Materials	conversion
Units to account for during production:
Inventory in process, April 1	700
Received from Cooking Department	7400
Total units accounted for by the Filling Deptt.	8100
Units to be assigned costs:
Inventory in process, April (30%)	700		210
Started and completed in April	6900	6900	6900
Transferred to finished goods in april	7600
Inventory in process, April 30 (90%)	500	500	450
Total units to be assigned costs		7400	7560

1b)

costs	Direct materials	conversion	total
Cost per equivalent unit:
Total production costs for April in filling department	34780	10976
Total equivalent units	7400	7560
Cost per equivalent unit	4.70	1.45 (round off)
Costs assigned to production:
Inventory in process April 1	3220	368
Costs incurred in april	34780	10976
Total costs accounted for by the filling department	38000	11344	49344
Cost allocated to completed and partially completed units:
Inventory in process, April 1 balance	3220	368	3588
To complete inventory in process April 1	0	305	305
Cost of completed April 1 work in process	3220	673	3893
Started and completed in April	6900*4.70=32430	6900*1.45=10005	42435
Transferred to finished goods in April	35650	11351	46328
Inventory in process, April 30	500*4.70=2350	450*1.45=666 (rounded off)	3016
Total costs assigned by the Filling Department			49344