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, 8,400 units, 75% completed		$102,060*
*Direct materials (8,400 × $8.4)	$70,560
Conversion (8,400 × 75% × $5)	31,500
	$102,060
Materials added during January from Weaving Department, 129,200 units		$1,098,200
Direct labor for January		290,409
Factory overhead for January		354,945
Goods finished during January (includes goods in process, January 1), 130,800 units		—
Work in process, January 31, 6,800 units, 30% 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 The rate used to allocate costs between completed and partially completed production.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 Units Direct Materials Conversion 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 Materials Conversion Total costs for January in Cutting Department $ $ Total equivalent units Cost per equivalent unit $ $ Costs assigned to production: Direct Materials Conversion Total 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 $ Feedback b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places. Increase or Decrease Amount Change in direct materials cost per equivalent unit Decrease Increase $ Change in conversion cost per equivalent unit Decrease Increase

Answer 1

a)

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	8,400
Received from Weaving Department	129,200
Total units accounted for by the Cutting Department	137,600
Units to be assigned costs:
		Equivalent	units
	Whole Units	Direct Materials	conversion
Inventory in process, January 1	8,400	0	2,100
Started and completed in January	122,400	122,400	122,400
Transferred to finished goods in January	130,800	122,400	124,500
Inventory in process, January 31	6,800	6,800	2,040
Total units to be assigned cost	137,600	129,200	126,540
cost inversion
Cost per equivalent unit
Cost Information Costs per equivalent unit:		Direct Materials	Conversion
Total costs for January in Cutting Department		1,098,200	645,354
Total equivalent units		129,200	126,540
Cost per equivalent unit		8.5	5.1
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			1,02,060
Costs incurred in January			1,743,554
Total costs accounted for by the Cutting Department			1,845,614
Costs allocated to completed and partially completed units
Inventory in process, January 1 balance			1,02,060
To complete inventory in process, January 1		10,710	10,710
Cost of completed January 1 work in process			112,770
Started and completed in January	1,040,400	624,240	1,664,640
Transferred to finished goods in January			1,777,410
Inventory in process, January 31	57,800	10,404	68,204
Total costs assigned by the Cutting Department			1,845,614

b)
Change in direct materials cost per equivalent unit---------Increase-----------0.1

Change in conversion cost per equivalent unit---------------Increase-----------0.1