Question

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, 1,200 pounds, 40% completed $3,888* *Direct materials (1,200 X $2.8) $3,360 Conversion (1,200 X 40% X $1.1) $528 $3,888 Coffee beans added during August, 38,000 pounds 104,500 Conversion costs during August 45,264 Work in process, August 31, 2,000 pounds, 50% completed ? Goods finished during August, 37,200 pounds ? All direct materials are placed in process at the beginning of production. a. Prepare a cost of production report, presenting the following computations: Direct materials and conversion equivalent units of production for August Direct materials and conversion costs per equivalent unit for August Cost of goods finished during August 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 1,200 Received from materials storeroom 38,000 Total units accounted for by the Roasting Department 39,200 Units to be assigned costs: Equivalent Units Whole Units Direct Materials (1) Conversion (1) Inventory in process, August 1 1,200 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 Compan
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1			1200
Received from materials storeroom			38000
Total units accounted for by the Roasting Department			39200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	1200	0	720
Started and completed in August	36000	36000	36000
Transferred to finished goods in August	37200	36000	36720
Inventory in process, August 31	2000	2000	1000
Total units to be assigned costs	39200	38000	37720
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		104500	45264
Total equivalent units		38000	37720
Cost per equivalent unit		2.75	1.20
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			3888
Costs incurred in August			149764
Total costs accounted for by the Roasting Department			153652
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			3888
To complete inventory in process, August 1	0	864	864
Cost of completed August 1 work in process			4752
Started and completed in August	99000	43200	142200
Transferred to finished goods in August			146952
Inventory in process, August 31	5500	1200	6700
Total costs assigned by the Roasting Department			153652
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=2.8-2.75
Change in conversion cost per equivalent unit	Increase	0.10	=1.2-1.1