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, 800 pounds, 10% completed				$3,160*
	*Direct materials (800 X $3.8)	$3,040
	Conversion (800 X 10% X $1.5)	$120
		$3,160
Coffee beans added during August, 25,000 pounds				93,750
Conversion costs during August				40,112
Work in process, August 31, 1,300 pounds, 50% completed				?
Goods finished during August, 24,500 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			800
Received from materials storeroom			25000
Total units accounted for by the Roasting Department			25800
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	800	0	720
Started and completed in August	23700	23700	23700
Transferred to finished goods in August	24500	23700	24420
Inventory in process, August 31	1300	1300	650
Total units to be assigned costs	25800	25000	25070
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		93750	40112
Total equivalent units		25000	25070
Cost per equivalent unit		3.75	1.60
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			3160
Costs incurred in August			133862
Total costs accounted for by the Roasting Department			137022
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			3160
To complete inventory in process, August 1	0	1152	1152
Cost of completed August 1 work in process			4312
Started and completed in August	88875	37920	126795
Transferred to finished goods in August			131107
Inventory in process, August 31	4875	1040	5915
Total costs assigned by the Roasting Department			137022
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=3.8-3.75
Change in conversion cost per equivalent unit	Increase	0.10	=1.6-1.5