Question

1. 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, 10,200 units, 75% completed		$116,025*
   *Direct materials (10,200 × $8.00)	$81,600
   Conversion (10,200 × 75% × $4.50)	34,425
   	$116,025
   Materials added during January from Weaving Department, 157,200 units		$1,281,180
   Direct labor for January		318,511
   Factory overhead for January		389,291
   Goods finished during January (includes goods in process, January 1), 159,000 units		—
   Work in process, January 31, 8,400 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 unit computations, 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			fill in the blank c9badbff1f81fe7_1
   Received from Weaving Department			fill in the blank c9badbff1f81fe7_2
   Total units accounted for by the Cutting Department			fill in the blank c9badbff1f81fe7_3
   Units to be assigned costs:
   		Equivalent Units
   	Whole Units	Direct Materials	Conversion
   Inventory in process, January 1	fill in the blank c9badbff1f81fe7_4	fill in the blank c9badbff1f81fe7_5	fill in the blank c9badbff1f81fe7_6
   Started and completed in January	fill in the blank c9badbff1f81fe7_7	fill in the blank c9badbff1f81fe7_8	fill in the blank c9badbff1f81fe7_9
   Transferred to finished goods in January	fill in the blank c9badbff1f81fe7_10	fill in the blank c9badbff1f81fe7_11	fill in the blank c9badbff1f81fe7_12
   Inventory in process, January 31	fill in the blank c9badbff1f81fe7_13	fill in the blank c9badbff1f81fe7_14	fill in the blank c9badbff1f81fe7_15
   Total units to be assigned cost	fill in the blank c9badbff1f81fe7_16	fill in the blank c9badbff1f81fe7_17	fill in the blank c9badbff1f81fe7_18
   Cost Information
   Cost per equivalent unit:
   		Direct Materials	Conversion
   Total costs for January in Cutting Department		$fill in the blank c9badbff1f81fe7_19	$fill in the blank c9badbff1f81fe7_20
   Total equivalent units		fill in the blank c9badbff1f81fe7_21	fill in the blank c9badbff1f81fe7_22
   Cost per equivalent unit		$fill in the blank c9badbff1f81fe7_23	$fill in the blank c9badbff1f81fe7_24
   Costs assigned to production:
   	Direct Materials	Conversion	Total
   Inventory in process, January 1			$fill in the blank c9badbff1f81fe7_25
   Costs incurred in January			fill in the blank c9badbff1f81fe7_26
   Total costs accounted for by the Cutting Department			$fill in the blank c9badbff1f81fe7_27
   Costs allocated to completed and partially completed units:
   Inventory in process, January 1 balance			$fill in the blank c9badbff1f81fe7_28
   To complete inventory in process, January 1	$fill in the blank c9badbff1f81fe7_29	$fill in the blank c9badbff1f81fe7_30	fill in the blank c9badbff1f81fe7_31
   Cost of completed January 1 work in process			$fill in the blank c9badbff1f81fe7_32
   Started and completed in January	fill in the blank c9badbff1f81fe7_33	fill in the blank c9badbff1f81fe7_34	fill in the blank c9badbff1f81fe7_35
   Transferred to finished goods in January			$fill in the blank c9badbff1f81fe7_36
   Inventory in process, January 31	fill in the blank c9badbff1f81fe7_37	fill in the blank c9badbff1f81fe7_38	fill in the blank c9badbff1f81fe7_39
   Total costs assigned by the Cutting Department			$fill in the blank c9badbff1f81fe7_40

   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		$fill in the blank f115df085fd3fa2_2
   Change in conversion cost per equivalent unit		$fill in the blank f115df085fd3fa2_4

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			10200
Received from materials storeroom			157200
Total units accounted for by the Cutting Department			167400
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, January 1	10200	0	2550
Started and completed in January	148800	148800	148800
Transferred to finished goods in January	159000	148800	151350
Inventory in process, January 31	8400	8400	2520
Total units to be assigned costs	167400	157200	153870
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for January in Cutting Department		1281180	707802
Total equivalent units		157200	153870
Cost per equivalent unit		8.15	4.60
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			116025
Costs incurred in January			1988982
Total costs accounted for by the Cutting Department			2105007
Cost allocated to completed and partially completed units:
Inventory in process, January 1 balance			116025
To complete inventory in process, January 1	0	11730	11730
Cost of completed January 1 work in process			127755
Started and completed in January	1212720	684480	1897200
Transferred to finished goods in January			2024955
Inventory in process, January 31	68460	11592	80052
Total costs assigned by the Cutting Department			2105007
b
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.15	=8.15-8.00
Change in conversion cost per equivalent unit	Increase	0.10	=4.60-4.50