Question

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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, 500 pounds, 60% completed				$2,300*
	*Direct materials (500 X $3.7)	$1,850
	Conversion (500 X 60% X $1.5)	450
		$2,300
Coffee beans added during August, 16,000 pounds				58,400
Conversion costs during August				25,280
Work in process, August 31, 800 pounds, 50% completed				?
Goods finished during August, 15,700 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
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			$

Feedback

a. How much more (percentage amount) needed to be done to the beginning work in process units to make the units to complete to transfer to the next department? Did these units require more material cost or more conversion cost? How much, in terms of cost, had been done to these units in the prior period? In order for units to be transferred to the next department, the units have to be complete with respect to both materials and conversion. When are materials added in the process? How complete are the units in ending inventory with respect to materials? How compete are the units in ending inventory with respect to conversion? Materials and conversion cost needs to be allocated among the equivalent units. Are the number of equivalent units the same for materials and conversion?

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	Decrease	$
Change in conversion cost per equivalent unit	Increase	$

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			500
Received from materials storeroom			16000
Total units accounted for by the Roasting Department			16500
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	500	0	200
Started and completed in August	15200	15200	15200
Transferred to Packing Department in August	15700	15200	15400
Inventory in process, August 31	800	800	400
Total units to be assigned costs	16500	16000	15800
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		58400	25280
Total equivalent units		16000	15800
Cost per equivalent unit		3.65	1.6
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			2300
Costs incurred in August			83680
Total costs accounted for by the Roasting Department			85980
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			2300
To complete inventory in process, August 1	0	320	320
Cost of completed August 1 work in process			2620
Started and completed in August	55480	24320	79800
Transferred to Packing Department in August			82420
Inventory in process, August 31	2920	640	3560
Total costs assigned by the Roasting Department			85980
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05
Change in conversion cost per equivalent unit	Increase	0.1