Question

1. 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, 1,000 pounds, 10% completed				$5,510*
   	*Direct materials (1,000 X $5.3)	$5,300
   	Conversion (1,000 X 10% X $2.1)	$210
   		$5,510
   Coffee beans added during August, 31,000 pounds				162,750
   Conversion costs during August				67,716
   Work in process, August 31, 1,600 pounds, 30% completed				?
   Goods finished during August, 30,400 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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units			1,000
Add: Units Started in Process			31,000
Total Units to account for:			32,000
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WP		1,000
Units started and completed			29,400
Ending Work in Process			1,600
Total Units to be accounted for:		32,000
Equivalent Units:
			UNITS	Material Cost	Conversion
				% Completion	Units	% Completion	Units
Units completed from Beg. Wip	1000	0%	0	90%	900
Units started and completed	29400	100%	29,400	100%	29,400
Ending Work in Process	1600	100%	1,600	30%	480
Total Equivalent units	32000		31,000		30,780
TOTAL COST TO ACCOUNT FOR:
				Material		Conversion
Cost Added during May		1,62,750		67,716
Total Cost to account for:		1,62,750		67,716
Equivalent Units			31,000		30,780
Cost per Equivalent unit		5.25		2.2
			Material	Conversion	Total
Cost of beginning WIP			5510
Current cost added		162750	67716	230466
Total cost			162750	67716	235976
Cost allocated to completed and partially completed units:
Inventory in beginning balance			5510
To complete the inventory in process	0	1980	1980
Cost of completed beg. Wip			7490
Started and completed	154350	64680	219030
Transferred to Finished goods	154350	66660	226520
Inventory in process at end	8400	1056	9456
Total cost assigned		162750	67716	235976
			Inc/Dec	Amount $
Change in material cost	Decrease	0.05
Change in conversion cost	Increase	0.1