Question

1. 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, 1,100 pounds, 10% completed				$3,091*
   	*Direct materials (1,100 X $2.7)	$2,970
   	Conversion (1,100 X 10% X $1.1)	121
   		$3,091
   Coffee beans added during August, 34,000 pounds				90,100
   Conversion costs during August				40,476
   Work in process, August 31, 1,800 pounds, 30% completed				?
   Goods finished during August, 33,300 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
   Cost 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		$

Check My Work

Answer 1

a)

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			1100
Received from materials storeroom			34000
Total units accounted for by the Roasting department			35100
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1	1100	0	(1100*90%)= 990
Started and completed in August	(33300-1100)= 32200	32200	32200
Transferred to finished goods in August	33300	32200	33190
Inventory in process, August 31	1800	1800	(1800*30%)= 540
Total units to be assigned costs	35100	34000	33730
Cost Information
Cost per equivalent unit:
		Direct materials	Conversion
Total costs for August in Roasting department		$90100	$40476
Total equivalent units		34000	33730
Cost per equivalent unit (2)		$2.65	$1.20
Cost assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$3091
Costs incurred in August (90100+40476)			130576
Total costs accounted for by the Roasting department			$133667
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$3091
To complete inventory in process, August 1	$0	(990*$1.20)= $1188	1188
Cost of completed August 1 work in process			$4279
Started and completed in August	(32200*$2.65)= 85330	(32200*$1.20)= 38640	123970
Transferred to finished goods in August (3)			$128249
Inventory in process, August 31 (4)	(1800*$2.65)= 4770	(540*$1.20)= 648	5418
Total costs assigned by the Roasting department			$133667

b)

	Increase/Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	($2.70-2.65)= $0.05
Change in conversion cost per equivalent unit	Increase	($1.10-1.20)= $0.10