Question

In: Accounting

Arabica Highland Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans...

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 $

Solutions

Expert Solution

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

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