Question

Cost of Production Report

Venus Chocolate Company processes chocolate into candy bars. The process begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Department. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the Molding Department, where the milk chocolate is formed into candy bars. The following is a partial work in process account of the Blending Department at March 31, 2016:

ACCOUNT Work in Process—Blending Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 5,300 units, 1/5 completed					7,950
	31	Direct materials, 212,000 units	318,000				325,950
	31	Direct labor	68,600				394,550
	31	Factory overhead	17,208				411,758
	31	Goods transferred, 213,000 units			?
	31	Bal., ? units, 3/5 completed					?

Required:

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

Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31, 2016
Unit Information
Units charged to production:
Inventory in process, March 1
Received from materials storeroom
Total units accounted for by the Blending Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1
Started and completed in March
Transferred to Molding Department in March
Inventory in process, March 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Blending Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			$
Costs incurred in March
Total costs accounted for by the Blending Department			$
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			$
To complete inventory in process, March 1	$	$
Cost of completed March 1 work in process			$
Started and completed in March
Transferred to Molding Department in March			$
Inventory in process, March 31
Total costs assigned by the Blending Department			$

2. Assuming that the March 1 work in process inventory includes $7,420 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March. 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

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

Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31, 2016
Unit Information
Units charged to production:
Inventory in process, March 1			5300
Received from materials storeroom			212000
Total units accounted for by the Blending Department			217300
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, March 1	5300	0	5300*4/5 = 4240
Started and completed in March	207700	207700	207700
Transferred to Molding Department in March	213000	207700	211940
Inventory in process, March 31	4300	4300	4300*3/5 = 2580
Total units to be assigned costs	217300	212000	214520
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for March in Blending Department		$318000	$85808
Total equivalent units		212000	214520
Cost per equivalent unit		$1.5	$0.40
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1			$7950
Costs incurred in March			403808
Total costs accounted for by the Blending Department			$411758
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance			$7950
To complete inventory in process, March 1	$0	4240*.40 = 1696	1696
Cost of completed March 1 work in process			9646
Started and completed in March	311550	83080	394630
Transferred to Molding Department in March			$404276
Inventory in process, March 31	4300*1.5 = 6450	2580*.40 = 1032	7482
Total costs assigned by the Blending Department			$411758

2. Assuming that the March 1 work in process inventory includes $7,420 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March. If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	$1.50-1.40 = 0.10
Change in conversion cost per equivalent unit	Decrease	$0.50-0.40 = -0.10