Question

Cost of Production Report

The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.

Work in process, January 1, 7,600 units, 80% completed $82,688*

    *Direct materials (7,600 × $8.00)$60,800

    Conversion (7,600 × 80% × $3.60)21,888

$82,688

Materials added during January from Weaving Department, 117,200 units $949,320

Direct labor for January 181,613

Factory overhead for January 221,972

Goods finished during January (includes goods in process, January 1), 118,600 units —

Work in process, January 31, 6,200 units, 45% completed —

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.

Karachi Carpet Company

Cost of Production Report-Cutting Department

For the Month Ended January 31

Unit Information

Units charged to production:

Inventory in process, January 1

Received from Weaving Department

Total units accounted for by the Cutting Department

Units to be assigned costs:

Equivalent Units

Whole UnitsDirect MaterialsConversion

Inventory in process, January 1

Started and completed in January

Transferred to finished goods in January

Inventory in process, January 31

Total units to be assigned cost

Cost Information

Cost per equivalent unit:

Direct MaterialsConversion

Total costs for January in Cutting Department$$

Total equivalent units

Cost per equivalent unit$$

Costs assigned to production:

Direct MaterialsConversionTotal

Inventory in process, January 1$

Costs incurred in January

Total costs accounted for by the Cutting Department$

Costs allocated to completed and partially completed units:

Inventory in process, January 1 balance$

To complete inventory in process, January 1$$

Cost of completed January 1 work in process$

Started and completed in January

Transferred to finished goods in January$

Inventory in process, January 31

Total costs assigned by the Cutting Department$

b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places.

Increase or DecreaseAmount

Change in direct materials cost per equivalent unit $

Change in conversion cost per equivalent unit $

Answer 1

a.)	Unit Information
	Inventory in process, January 1			7,600
	Received from weaving department			117,200
	Total units accounted for by the cutting department			124,800
	Units to be assigned costs:		Equivalent	Units
		Whole	Direct
		Unit	Materials	Conversion
	Inventory in process, January 1 ( Material 0% , Conversion 20% )	7,600	-	1,520
	Started & Completed in January ( 117,200 - 6,200 )	111,000	111,000	111,000
	Transferred to finished goods in January	118,600	111,000	112,520
	Inventory in process, January 31 ( Material 100%, Conversion 45% )	6,200	6,200	2,790
	Total units to assigned cost	124,800	117,200	115,310
	Cost Information
	Cost per equivalent unit
			Direct
			Materials	Conversion
	Total Costs for january in cutting department		949,320	403,585
	/Total Equivalent units		117,200	115,310
	Cost per equivalent unit		8.10	3.50
	Costs assigned to production:
		Direct
		Materials	Conversion	Total
	Inventory in process, January 1			82,688
	Costs incurred in January			1,352,905
	Total Costs accounted for by the cutting department			$ 1,435,593
	Costs allocated to completed & partially completed units
	Inventory in process, January 1, Balance			82,688
	To Complete Inventory in process, January 1 (1,520 x 3.50 )	-	5,320	5,320
	Costs of completed january 1 work in process			88,008
	Started & Completed in January (111,000 x cost per equivalent unit)	899,100	388,500	1,287,600
	Transferred to finished goods in January			1,375,608
	Inventory in process, January 31 (6,200 x 8.10 , 2,790 x 3.50 )	50,220	9,765	59,985
	Total Costs assigned by cutting department			$1,435,593
(b)		Increase or Decrease	Amount $
	Change in direct materials cost per equivalent unit	Increase	0.10	( 8.10 - 8.00 )
	Change in Conversion cost per equivalent unit	Decrease	0.10	(3.60 - 3.50 )