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, 700 pounds, 20% completed				$2,954*
	*Direct materials (700 X $3.9)	$2,730
	Conversion (700 X 20% X $1.6)	$224
		$2,954
Coffee beans added during August, 22,000 pounds				84,700
Conversion costs during August				37,604
Work in process, August 31, 1,100 pounds, 60% completed				?
Goods finished during August, 21,600 pounds				?

All direct materials are placed in 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 at 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

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			700
Received from materials storeroom			22000
Total units accounted for by the Roasting Department			22700
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	700	0	560
Started and completed in August	20900	20900	20900
Transferred to finished goods in August	21600	20900	21460
Inventory in process, August 31	1100	1100	660
Total units to be assigned costs	22700	22000	22120
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		84700	37604
Total equivalent units		22000	22120
Cost per equivalent unit		3.85	1.70
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			2954
Costs incurred in August			122304
Total costs accounted for by the Roasting Department			125258
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			2954
To complete inventory in process, August 1	0	952	952
Cost of completed August 1 work in process			3906
Started and completed in August	80465	35530	115995
Transferred to finished goods in August			119901
Inventory in process, August 31	4235	1122	5357
Total costs assigned by the Roasting Department			125258
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=3.9-3.85
Change in conversion cost per equivalent unit	Increase	0.10	=1.7-1.6