Question

1. The Cutting Department of Tangu Carpet Company provides the following data for December 2016. Assume that all materials are added at the beginning of the process.

   Work in process, December 1, 14,600 units, 80% completed		$178,704*
   *Direct materials (14,600 × $9.2)	$134,320
   Conversion (14,600 × 80% × $3.8)	44,384
   	$178,704
   Materials added during December from Weaving Department, 224,800 units		$2,101,880
   Direct labor for December		385,960
   Factory overhead for December		471,728
   Goods finished during December (includes goods in process, December 1), 227,400 units		—
   Work in process, December 31, 12,000 units, 35% completed		—

   a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the The rate used to allocate costs between completed and partially completed production.cost per equivalent unit computations, round your answers to two decimal places.

   Tangu Carpet Company
   Cost of Production Report-Cutting Department
   For the Month Ended December 31, 2016
   Unit Information
   Units charged to production:
   Inventory in process, December 1
   Received from Weaving Department
   Total units accounted for by the Cutting Department
   Units to be assigned costs:
   		Equivalent Units
   	Whole Units	Direct Materials	Conversion
   Inventory in process, December 1
   Started and completed in December
   Transferred to finished goods in December
   Inventory in process, December 31
   Total units to be assigned cost
   Cost Information
   Costs per equivalent unit:
   		Direct Materials	Conversion
   Total costs for December in Cutting Department		$	$
   Total equivalent units
   Cost per equivalent unit		$	$
   Costs assigned to production:
   	Direct Materials	Conversion	Total
   Inventory in process, December 1			$
   Costs incurred in December
   Total costs accounted for by the Cutting Department			$
   Costs allocated to completed and partially completed units:
   Inventory in process, December 1 balance			$
   To complete inventory in process, December 1		$
   Cost of completed December 1 work in process			$
   Started and completed in December	$
   Transferred to finished goods in December			$
   Inventory in process, December 31
   Total costs assigned by the Cutting Department			$

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   b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). If required, round your answers to two decimal places.

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

Answer 1

Production Cost report

Tangu Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31, 2016
Unit information
Units charged to production:
Inventory in process, December 1			14600
Received from Weaving Department			224800
Total units accounted for by the Cutting Department			239400
		Equivalent unit
	Whole Unit	Direct material	Conversion Cost
Inventory in process, December 1	14600	0	14600*20% = 2920
Started and completed in December	212800	212800	212800
Transferred to finished goods in December	227400	212800	215720
Inventory in process, December 31	12000	12000	12000*35% = 4200
Total units to be assigned cost	239400	224800	219920
Cost information
Cost per equivalent unit
Total costs for December in Cutting Department		2101880	857688
Total equivalent units		224800	219920
Cost per equivalent unit		9.35	3.90
Costs assigned to production:
	Direct material	Conversion	Total
Inventory in process, December 1			178704
Cost in December			2959568
Total costs accounted for by the Cutting Department			3138272
Costs allocated to completed and partially completed units:
Inventory in process, December 1 balance			178704
To complete inventory in process, December 1 (2920*3.9)		11388	11388
Cost of completed December 1 work in process			190092
Started and completed in December			2819600
Transferred to finished goods in December			3009692
Inventory in process, December 31	112200	16380	128580
Total costs assigned by the Cutting Department			3138272

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). If required, round your answers to two decimal places.

	Increase or decrease	Amount
Change in direct materials cost per equivalent unit	Increase	9.35-9.20 = 0.15
Change in conversion cost per equivalent unit	Increase	3.90-3.80 = 0.10