Question

The debits to Work in Process—Roasting Department for St. Arbucks Coffee Company for July 2016, together with information concerning production, are as follows:

Work in process, July 1, 500 pounds, 30% completed				$2,635*
	*Direct materials (500 X $4.7)	$2,350
	Conversion (500 X 30% X $1.9)	$285
		$2,635
Coffee beans added during July, 16,000 pounds				74,400
Conversion costs during July				32,060
Work in process, July 31, 800 pounds, 60% completed				?
Goods finished during July, 15,700 pounds				?

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

Direct materials and conversion equivalent units of production for July.

Direct materials and conversion costs per equivalent unit for July.

Cost of goods finished during July.

Cost of work in process at July 31, 2016.

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

St. Arbucks Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended July 31, 2016
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 (1)	Conversion (1)
Inventory in process, July 1
Started and completed in July
Transferred to finished goods in July
Inventory in process, July 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit (2)		$	$
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			$
Cost 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 finished goods in July (3)			$
Inventory in process, July 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 (June). 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		$

Pr

Answer 1

Formula sheet

A1	B	C	D	E	F	G	H
2		a)
3		Units To be accounted for:
4		WIP, July 1	500
5		Received materials from storeroom	16000
6		Total units to be accounted by roasting department	=SUM(D4:D5)
7
8		Units to be assigned costs:
9		Units	Total	Direct Materials	Conversion Cost
10		Inventory in process (30% completed)	900	0	=D10*(1-30%)
11		Units Started and completed in July	=D12-D10	=D11	=E11
12		Transferred to finished goods in July	27500	=E10+E11	=F10+F11
13		Equivalent units of ending WIP (60% complete for conversion)	1400	=D13	=D13*60%
14		Total Equivalent units		=E12+E13	=F12+F13
15
16
17		Cost per equivalent units	Direct Materials	Conversion Cost
18		Total cost for July in Roasting Department	74400	32060
19		Total equivalent units	=E14	=F14
20		Cost per equivalent units	=D18/D19	=E18/E19
21
22		Cost assigned to production	Direct Materials	Conversion Cost	Total Cost
23		Inventory in process			2635
24		Cost during July			=D18+E18
25		Total cost to be accounted for by Roasting Deparment			=SUM(F23:F24)
26
27		Cost allocated to completed and partially completed units
28			Direct Materials	Conversion Cost	Total Cost
29		Inventory in process July 1			=F23
30		Cost to complete work in process on July 1		=F10*E20	=E30
31		Started and completed during July	=E11*D20	=F11*E20	=D31+E31
32		Transferred to finished product in July			=F29+F30+F31
33		Inventory in process July 31	=E13*D20	=F13*E20	=D33+E33
34		Total Cost assigned by Roasting Department			=F32+F33
35		b)
36		Cost per equivalent units	June	July	Increase/Decrease	Amount
37		Direct Material	4.7	=D20	Decrease	=E37-D37
38		Conversion costs	1.9	=E20	Decrease	=E38-D38
39