Question

Cost of Production Report

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:

ACCOUNT Work in Process—Roasting DepartmentACCOUNT NO.

DateItemDebitCreditBalance

DebitCredit

July1Bal., 4,800 units, 4/5 completed  18,336  

31Direct materials, 216,000 units691,200  709,536  

31Direct labor136,400  845,936  

31Factory overhead34,096  880,032  

31Goods transferred, 216,000 units ?   

31Bal., ? units, 1/5 completed  ?  

Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.

Hana Coffee Company

Cost of Production Report-Roasting Department

For the Month Ended July 31

Unit Information

Units charged to production:

Inventory in process, July 1

Received from materials storeroom

Total units accounted for by the Roasting Department

Units to be assigned costs:

Equivalent Units

Whole UnitsDirect MaterialsConversion

Inventory in process, July 1

Started and completed in July

Transferred to Packing Department in July

Inventory in process, July 31

Total units to be assigned costs

Cost Information

Cost per equivalent unit:

Direct MaterialsConversion

Total costs for July in Roasting Department$$

Total equivalent units

Cost per equivalent unit$$

Costs assigned to production:

Direct MaterialsConversionTotal

Inventory in process, July 1$

Costs incurred in July

Total costs accounted for by the Roasting Department$

Costs allocated to completed and partially completed units:

Inventory in process, July 1 balance$

To complete inventory in process, July 1$$

Cost of completed July 1 work in process$

Started and completed in July

Transferred to Molding Department in July$

Inventory in process, July 31

Total costs assigned by the Roasting Department$

2. Assuming that the July 1 work in process inventory includes $14,880 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.

Increase or DecreaseAmount

Change in direct materials cost per equivalent unit $

Change in conversion cost per equivalent unit $

Answer 1

Hana Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended July 31
Unit Information
Units charged to production:
Inventory in process, July 1			4800
Received from materials storeroom			216000
Total units accounted for by the Roasting Department			220800
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	4800	0	960
Started and completed in July	211200	211200	211200
Transferred to Packing Department in July	216000	211200	212160
Inventory in process, July 31	4800	4800	960
Total units to be assigned costs	220800	216000	213120
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		691200	170496
Total equivalent units		216000	213120
Cost per equivalent unit		3.20	0.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			18336
Costs incurred in July			861696
Total costs accounted for by the Roasting Department			880032
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			18336
To complete inventory in process, July 1	0	768	768
Cost of completed July 1 work in process			19104
Started and completed in July	675840	168960	844800
Transferred to Packing Department in July			863904
Inventory in process, July 31	15360	768	16128
Total costs assigned by the Roasting Department			880032
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.10	=3.2-(14880/4800)
Change in conversion cost per equivalent unit	Decrease	0.10	=0.8-((18336-14880)/(4800*4/5))