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, 400 pounds, 50% completed				$1,720*
	*Direct materials (400 X $3.6)	$1,440
	Conversion (400 X 50% X $1.4)	$280
		$1,720
Coffee beans added during July, 13,000 pounds				46,150
Conversion costs during July				19,485
Work in process, July 31, 700 pounds, 70% completed				?
Goods finished during July, 12,700 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		$

Answer 1

St. Arbucks Coffee Company									Remarks
Cost of Production Report-Roasting Department
For the Month Ended July 31, 2016
Unit Information
Units charged to production:
Inventory in process, July 1						400 Pound
Received from materials storeroom						13000 Pound
Total units accounted for by the Roasting Department						13400 Pound
Units to be assigned costs:
				Equivalent Units
	Whole Units			Direct Materials (1)			Conversion (1)
Inventory in process, July 1	400			0			200		Direct material taken 0 since the same were taken 100% in WIP during last month
Started and completed in July	12300			12300			12300
Transferred to finished goods in July	12700			12300			12500
Inventory in process, July 31	700			700			490		Conversion taken at 490 i.e. 70% of 700
Total units to be assigned costs	13400			13000			12990
Cost Information
Costs per equivalent unit:
			Direct Materials			Conversion
Total costs for July in Roasting Department			46150			19485
Total equivalent units			13000			12990
Cost per equivalent unit (2)			3.55			1.50
Costs assigned to production:
		Direct Materials			Conversion			Total
Inventory in process, July 1		0			300.00			300.00	Direct material taken 0 since the same were taken 100% in WIP during last month
Costs incurred in July		46,150.00			19,185.00			65,335.00
Total costs accounted for by the Roasting Department		46,150.00			19,485.00			65,635.00
Cost allocated to completed and partially completed units:		3.55 per unit			1.55 per unit
Inventory in process, July 1 balance		1440			280			1720	As given in question
To complete inventory in process, July 1		0			300			300	conversion cost at 400unit * 50% (balance work during current month) * 1.50 (Rate during July for conversion)
Cost of completed July 1 work in process		1440			580			2020
Started and completed in July		43665			18450				12300 units were started & completed in july
Transferred to finished goods in July (3)		43665			18750			62415	12700 units were transferred to finished goods i.e. Sum of "To complete inventory in process, July 1" & "started and completed in July"
Inventory in process, July 31 (4)		2485			735			3220	700 pounds; 100% for material @ 3.55 per unit & 70% for conversion @ 1.50 per unit
Total costs assigned by the Roasting Department		46150			19485			65635	Total of 3 & 4

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	In July material cost is 3.55 per unit as compared to 3.60 per unit last month
Change in conversion cost per equivalent unit	Increase	0.1	In July conversion is 1.50 per unit as compared to 1.40 per unit last month