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, 50% completed				$3,450*
	*Direct materials (600 X $4.8)	$2,880
	Conversion (600 X 50% X $1.9)	$570
		$3,450
Coffee beans added during August, 19,000 pounds				90,250
Conversion costs during August				37,800
Work in process, August 31, 1,000 pounds, 60% 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			$

Feedback

a. How much more (percentage amount) needed to be done to the beginning work in process units to make the units 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 complete 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

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 (1)	Conversion (1)
Inventory in process, August 1	600	0	300
Started and completed in August A	18000	18000	18000
Transferred to finished goods in August	18600	18000	18300
Inventory in process, August 31	1000	1000	600
Total units to be assigned costs	19600	19000	18900
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		90250	37800
Total equivalent units		19000	18900
Cost per equivalent unit (2) B		4.75	2.00
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1	2880	570	3450
Costs incurred in August	90250	37800	128050
Total costs accounted for by the Roasting Department	93130	38370	131500
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			3450
To complete inventory in process, August 1 (300*2)	0	600	600
Cost of completed August 1 work in process			4050
Started and completed in August (A*B)	85500	36000	121500
Transferred to finished goods in August (3)			125550
Inventory in process, August 31 (4)	4750	1200	5950
Total costs assigned by the Roasting Department			131500
a)
more (percentage amount) needed to be done to the beginning work in process units to make the units complete to transfer to the next department	50%
It required conversion cost
Cost
Direct materials (600 X $4.8)	$2,880
Conversion (600 X 50% X $1.9)	$570
	$3,450
Material added at the beginning of the process
100% complete in terms of material for ending inventory
60% complete in terms of conversion for ending inventory
No the no. of units are not same
b)
Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	(4.8-4.75)
Change in conversion cost per equivalent unit	Increase	0.1
If any doubtplease comment