Question

Cost of Production Report

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 1,000 pounds, 60% completed				$4,960*
	*Direct materials (1,000 X $4)	$4,000
	Conversion (1,000 X 60% X $1.6)	$960
		$4,960
Coffee beans added during August, 31,000 pounds				122,450
Conversion costs during August				52,564
Work in process, August 31, 1,600 pounds, 70% completed				?
Goods finished during August, 30,400 pounds				?

All direct materials are placed in the process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

1. Direct materials and conversion equivalent units of production for August
2. Direct materials and conversion costs per equivalent unit for August
3. Cost of goods finished during August
4. Cost of work in process on August 31

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1			?
Received from materials storeroom			?
Total units accounted for by the Roasting Department			?
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1	?	?	?
Started and completed in August	?	?	?
Transferred to finished goods in August	?	?	?
Inventory in process, August 31	?	?	?
Total units to be assigned costs	?	?	?
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit (2)		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$
Costs incurred in August
Total costs accounted for by the Roasting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$
To complete inventory in process, August 1	$	$
Cost of completed August 1 work in process			$
Started and completed in August	$	$
Transferred to finished goods in August (3)			$
Inventory in process, August 31 (4)	$	$
Total costs assigned by the Roasting Department			$

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (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

a.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Units Information
Units charged to production:
Inventory in process, August 1	1000
Received from Materials storeroom	31000
Total units accounted for by the Roasting Department	32000
	Whole Units	Equivalent Units
	Direct Materials	Conversion
Units to be assigned costs:
Inventory in process, August 1 (40% completed this period)	1000	0	400
Started and completed in August (30400-1000)	29400	29400	29400
Transferred to Finished goods in August	30400	29400	29800
Inventory in process, August 31 (60% completed)	1600	1600	1120
Total units to be assigned costs	32000	31000	30920

COSTS Information
		Direct Materials	Conversion
Cost per equivalent unit:
Total costs for August in Roasting Department		$1,22,450	$52,564
/Total equivalent units		31000	30920
Cost per equivalent unit		$3.95	$1.70
	Direct Materials	Conversion	Total
Costs assigned to production:
Inventory in process, August 1			$4,960
Costs incurred in August			$1,75,014
Total costs accounted for by the Roasting Department			$1,79,974
Costs allocated to completed and partially completed units:
Inventory in process, August 1-balance			$4,960
To complete inventory in process, August 1 (Equi. Units*cost per Equi. Unit)	$0	$680	$680
Cost of completed August 1 work in process			$5,640
Started and completed in August	$1,16,130	$49,980	$1,66,110
Transferred to Finished Goods in August			$1,71,750
Inventory in process, August 31	$6,320	$1,904	$8,224
Total costs assigned by the Roasting Department			$1,79,974

b.

	Increase/ Decrease	Amount
Change in Direct materials Cost per Equivalent Unit ($3.95 -$4.00)	Decrease	-$0.05
Change in Conversion Cost per Equivalent Unit ($1.70 - $1.60)	Increase	$0.10