Question

Cost of Production Report

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:

ACCOUNT Work in Process—Roasting Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
July	1	Bal., 30,000 units, 10% completed					121,800
	31	Direct materials, 155,000 units	620,000				741,800
	31	Direct labor	90,000				831,800
	31	Factory overhead	33,272				865,072
	31	Goods transferred, 149,000 units			?
	31	Bal., ? units, 45% completed					?

Required:

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

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

2. Assuming that the July 1 work in process inventory includes $119,400 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. 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

Beggining units	30000	Transferred out	1,49,000
Started into production	155000	Ending units	36,000
	185000		185000
Equivalent units	Material	Conversion
Beginning units	30000	30000
Completion in current period	0%	90%
A	0	27000
Units started and completed	119000	119000
Completion	100%	100%
B	119000	119000
Ending Units	36,000	36,000
Completion	100%	45%
C	36000	16200
Total units A+B+C	155000	162200
Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	620000	155000	4.00
Conversion cost	123272	162200	0.76
Total	743272		4.76

Cost of goods sold	Material	convertion cost
Beginning work in progress A	119400	2400	121800
Beginning inventory completed
Completion	0%	90%
Per unit cost	4.00	0.76
Units	30000	30000
Total cost   B	0	20520	20520
Units started and completed
Completion	100%	100%
Per unit cost	4.00	0.76
Units	119000	119000
Total cost    C	476000	90440	566440
Total cost A+B+C	595400	110960	708760
Ending work in progress
Completion	100%	45%
Per unit cost	4.00	0.76
Units	36,000	36,000
Total cost	144000	12312	156312

Cost per equivalent unit	Material	Conversion cost
For current period	4.00	0.76
For beginning inventory	3.98	0.80
increase (decrease)	0.02	-0.04