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, 600 pounds, 40% completed $2,028* *Direct materials (600 X $2.9) $1,740 Conversion (600 X 40% X $1.2) $288 $2,028 Coffee beans added during August, 19,000 pounds 54,150 Conversion costs during August 24,778 Work in process, August 31, 1,000 pounds, 70% completed ? Goods finished during August, 18,600 pounds ? All direct materials are placed in process at the beginning of production. a. Prepare a cost of production report, presenting the following computations: 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 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			600
Received from materials storeroom			19000
Total units accounted for by the Roasting Department			19600
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	600	0	360
Started and completed in August	18000	18000	18000
Transferred to finished goods in August	18600	18000	18360
Inventory in process, August 31	1000	1000	700
Total units to be assigned costs	19600	19000	19060
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		54150	24778
Total equivalent units		19000	19060
Cost per equivalent unit		2.85	1.30
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			2028
Costs incurred in August			78928
Total costs accounted for by the Roasting Department			80956
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			2028
To complete inventory in process, August 1	0	468	468
Cost of completed August 1 work in process			2496
Started and completed in August	51300	23400	74700
Transferred to finished goods in August			77196
Inventory in process, August 31	2850	910	3760
Total costs assigned by the Roasting Department			80956
b
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=2.90-2.85
Change in conversion cost per equivalent unit	Increase	0.10	=1.3-1.2