Question

Arabica Highland Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:

ACCOUNT Work in Process—Roasting Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
July	1	Bal., 6,100 units, 1/5 completed					20,618
	31	Direct materials, 244,000 units	805,200				825,818
	31	Direct labor	158,000				983,818
	31	Factory overhead	39,472				1,023,290
	31	Goods transferred, 245,000 units			?
	31	Bal., ? units, 3/5 completed					?

Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.

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

2. Assuming that the July 1 work in process inventory includes $19,520 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. If required, round your answers to the nearest cent.

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

Answer 1

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.

Arabica Highland Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended July 31
Unit Information
Units charged to production:
Inventory in process, July 1			6100
Received from materials storeroom			244000
Total units accounted for by the Roasting Department			250100
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	6100	0	6100*4/5 = 4880
Started and completed in July	238900	238900	238900
Transferred to Packing Department in July	245000	238900	243780
Inventory in process, July 31	5100	5100	5100*3/5 = 3060
Total units to be assigned costs	250100	244000	246840
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$805200	$197472
Total equivalent units		244000	246840
Cost per equivalent unit		$3.3	$0.8
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$20618
Costs incurred in July			1002672
Total costs accounted for by the Roasting Department			$1023290
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			$20618
To complete inventory in process, July 1	$0	$3904	3904
Cost of completed July 1 work in process			$24522
Started and completed in July			979490
Transferred to Packing Department in July			$1004012
Inventory in process, July 31	16830	2448	19278
Total costs assigned by the Roasting Department			$1023290

2. Assuming that the July 1 work in process inventory includes $19,520 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	$0.10
Change in conversion cost per equivalent unit	Decrease	$0.10