Question

Cost of Production Report

The Cutting Department of Tangu Carpet Company provides the following data for December 2016. Assume that all materials are added at the beginning of the process.

Work in process, December 1, 11,400 units, 60% completed		$146,376*
*Direct materials (11,400 × $10.2)	$116,280
Conversion (11,400 × 60% × $4.4)	30,096
	$146,376
Materials added during December from Weaving Department, 175,600 units		$1,808,680
Direct labor for December		350,548
Factory overhead for December		428,447
Goods finished during December (includes goods in process, December 1), 177,600 units		—
Work in process, December 31, 9,400 units, 25% completed		—

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.

Tangu Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31, 2016
Unit Information
Units charged to production:
Inventory in process, December 1
Received from Weaving Department
Total units accounted for by the Cutting Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, December 1
Started and completed in December
Transferred to finished goods in December
Inventory in process, December 31
Total units to be assigned cost
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for December in Cutting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			$
Costs incurred in December
Total costs accounted for by the Cutting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, December 1 balance			$
To complete inventory in process, December 1		$
Cost of completed December 1 work in process			$
Started and completed in December	$
Transferred to finished goods in December			$
Inventory in process, December 31
Total costs assigned by the Cutting Department			$

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). If required, round your answers to two decimal places.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$
Change in conversion cost per equivalent unit		$

Answer 1

a.

Tangu Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31, 2016
Unit Information
Units charged to production:
Inventory in process, December 1	11400
Received from Weaving Department	175600
Total units accounted for by the Cutting Department	187000
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, December 1	11400	0	4560
Started and completed in December	166200	166200	166200
Transferred to finished goods in December	177600	166200	170760
Inventory in process, December 31	9400	9400	2350
Total units to be assigned cost	187000	175600	173110
Cost Information
Costs per equivalent unit:
	Direct Materials	Conversion
Total costs for December in Cutting Department $	1808680	778995
Total equivalent units	175600	173110
Cost per equivalent unit $	10.30	4.50
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, December 1			146376
Costs incurred in December			2587675
Total costs accounted for by the Cutting Department			2734051
Costs allocated to completed and partially completed units:
Inventory in process, December 1 balance			146376
To complete inventory in process, December 1 (4560 x $4.50)		20520	20520
Cost of completed December 1 work in process			166896
Started and completed in December (166200 x $10.30);(166200 x $4.50)	1711860	747900	2459760
Transferred to finished goods in December			2626656
Inventory in process, December 31 (9400 x $10.30);(2350 x $4.50)	96820	10575	107395
Total costs assigned by the Cutting Department			2734051

b.

	Increase or Decrease	Amount $
Change in direct materials cost per equivalent unit ($10.30 - $10.20)	Increase	0.10
Change in conversion cost per equivalent unit ($4.50 - $4.40)	Increase	0.10