Question

Cost of Production Report

Hana 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., 4,200 units, 2/5 completed					14,112
	31	Direct materials, 189,000 units	585,900				600,012
	31	Direct labor	121,000				721,012
	31	Factory overhead	30,200				751,212
	31	Goods transferred, 189,000 units			?
	31	Bal., ? units, 2/5 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.

Hana 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 Molding 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 $12,600 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.

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

Answer 1

Hana 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			4200
Received from materials storeroom			189000
Total units accounted for by the Roasting Department			193200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	4200	0	2520
Started and completed in July	184800	184800	184800
Transferred to Packing Department in July	189000	184800	187320
Inventory in process, July 31	4200	4200	1680
Total units to be assigned costs	193200	189000	189000
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		585900	151200
Total equivalent units		189000	189000
Cost per equivalent unit		3.10	0.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			14112
Costs incurred in July			737100
Total costs accounted for by the Roasting Department			751212
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			14112
To complete inventory in process, July 1	0	2016	2016
Cost of completed July 1 work in process			16128
Started and completed in July	572880	147840	720720
Transferred to Molding Department in July			736848
Inventory in process, July 31	13020	1344	14364
Total costs assigned by the Roasting Department			751212
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.1
Change in conversion cost per equivalent unit	Increase	0.2