Question

Cost of Production Report

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., 7,700 units, 3/5 completed					20,174
	31	Direct materials, 308,000 units	708,400				728,574
	31	Direct labor	146,700				875,274
	31	Factory overhead	36,732				912,006
	31	Goods transferred, 309,000 units			?
	31	Bal., ? units, 1/5 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			fill in the blank 8dfd4901dfde02d_1
Received from materials storeroom			fill in the blank 8dfd4901dfde02d_2
Total units accounted for by the Roasting Department			fill in the blank 8dfd4901dfde02d_3
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	fill in the blank 8dfd4901dfde02d_4	fill in the blank 8dfd4901dfde02d_5	fill in the blank 8dfd4901dfde02d_6
Started and completed in July	fill in the blank 8dfd4901dfde02d_7	fill in the blank 8dfd4901dfde02d_8	fill in the blank 8dfd4901dfde02d_9
Transferred to Packing Department in July	fill in the blank 8dfd4901dfde02d_10	fill in the blank 8dfd4901dfde02d_11	fill in the blank 8dfd4901dfde02d_12
Inventory in process, July 31	fill in the blank 8dfd4901dfde02d_13	fill in the blank 8dfd4901dfde02d_14	fill in the blank 8dfd4901dfde02d_15
Total units to be assigned costs	fill in the blank 8dfd4901dfde02d_16	fill in the blank 8dfd4901dfde02d_17	fill in the blank 8dfd4901dfde02d_18
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$fill in the blank 8dfd4901dfde02d_19	$fill in the blank 8dfd4901dfde02d_20
Total equivalent units		fill in the blank 8dfd4901dfde02d_21	fill in the blank 8dfd4901dfde02d_22
Cost per equivalent unit		$fill in the blank 8dfd4901dfde02d_23	$fill in the blank 8dfd4901dfde02d_24
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$fill in the blank 8dfd4901dfde02d_25
Costs incurred in July			fill in the blank 8dfd4901dfde02d_26
Total costs accounted for by the Roasting Department			$fill in the blank 8dfd4901dfde02d_27
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			$fill in the blank 8dfd4901dfde02d_28
To complete inventory in process, July 1	$fill in the blank 8dfd4901dfde02d_29	$fill in the blank 8dfd4901dfde02d_30	fill in the blank 8dfd4901dfde02d_31
Cost of completed July 1 work in process			$fill in the blank 8dfd4901dfde02d_32
Started and completed in July	fill in the blank 8dfd4901dfde02d_33	fill in the blank 8dfd4901dfde02d_34	fill in the blank 8dfd4901dfde02d_35
Transferred to Packing Department in July			$fill in the blank 8dfd4901dfde02d_36
Inventory in process, July 31	fill in the blank 8dfd4901dfde02d_37	fill in the blank 8dfd4901dfde02d_38	fill in the blank 8dfd4901dfde02d_39
Total costs assigned by the Roasting Department			$fill in the blank 8dfd4901dfde02d_40

2. Assuming that the July 1 work in process inventory includes $16,940 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		$fill in the blank 6ddc0df63ff3024_2
Change in conversion cost per equivalent unit		$fill in the blank 6ddc0df63ff3024_4

Please answer all parts.

Answer 1

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			7700
Received from materials storeroom			308000
Total units accounted for by the Roasting Department			315700
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	7700	0	3080
Started and completed in July	301300	301300	301300
Transferred to Packing Department in July	309000	301300	304380
Inventory in process, July 31	6700	6700	1340
Total units to be assigned costs	315700	308000	305720
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		708400	183432
Total equivalent units		308000	305720
Cost per equivalent unit		2.30	0.60
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			20174
Costs incurred in July			891832
Total costs accounted for by the Roasting Department			912006
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			20174
To complete inventory in process, July 1	0	1848	1848
Cost of completed July 1 work in process			22022
Started and completed in July	692990	180780	873770
Transferred to Packing Department in July			895792
Inventory in process, July 31	15410	804	16214
Total costs assigned by the Roasting Department			912006
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.10	=2.3-(16940/7700)
Change in conversion cost per equivalent unit	Decrease	0.10	=0.6-((20174-16940)/(7700*3/5))