Question

Cost of Production Report

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

Work in process, January 1, 1,400 units, 75% completed				$ 22,960*
	*Direct materials (1,400 X $12.65)	$17,710
	Conversion (1,400 X 75% X $5.00)	5,250
		$22,960
Materials added during January from Weaving Department, 58,000 units				$742,400
Direct labor for January				134,550
Factory overhead for January				151,611
Goods finished during January (includes goods in process, January 1), 56,200 units				—
Work in process, January 31, 3,200 units, 30% 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 unitcomputations, round your answers to two decimal places.

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

b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December). 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

Karachi Carpet Company
Cost of Production Report—Cutting Department
For the Month Ended January 31
Unit Information
Units charged to production:
Inventory in process, January 1			1400
Received from Weaving Department			58000
Total units accounted for by the Cutting Department			59400
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, January 1	1400	0	350
Started and completed in January	54800	54800	54800
Transferred to Packing Department in January	56200	54800	55150
Inventory in process, January 31	3200	3200	960
Total units to be assigned costs	59400	58000	56110
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for January in Cutting Department		742400	286161
Total equivalent units		58000	56110
Cost per equivalent unit		12.80	5.10
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			22960
Costs incurred in January			1028561
Total costs accounted for by the Cutting Department			1051521
Cost allocated to completed and partially completed units:
Inventory in process, January 1 balance			22960
To complete inventory in process, January 1	0	1785	1785
Cost of completed January 1 work in process			24745
Started and completed in January	701440	279480	980920
Transferred to Packing Department in January			1005665
Inventory in process, January 31	40960	4896	45856
Total costs assigned by the Cutting Department			1051521
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.15
Change in conversion cost per equivalent unit	Increase	0.1