Question

Cost of Production Report

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 1,100 pounds, 60% completed				$5,060*
	*Direct materials (1,100 X $3.7)	$4,070
	Conversion (1,100 X 60% X $1.5)	$990
		$5,060
Coffee beans added during August, 34,000 pounds				124,100
Conversion costs during August				53,952
Work in process, August 31, 1,800 pounds, 60% completed				?
Goods finished during August, 33,300 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 August.

Direct materials and conversion costs per equivalent unit for August.

Cost of goods finished during August.

Cost of work in process at August 31.

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

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 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, August 1
Started and completed in August
Transferred to finished goods in August
Inventory in process, August 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit (2)		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$
Costs incurred in August
Total costs accounted for by the Roasting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$
To complete inventory in process, August 1	$	$
Cost of completed August 1 work in process			$
Started and completed in August
Transferred to finished goods in August (3)			$
Inventory in process, August 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 (July). 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

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1			1100
Received from materials storeroom			34000
Total units accounted for by the Roasting Department			35100
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1	1100		440
Started and completed in August	32200	32200	32200
Transferred to finished goods in August	33300
Inventory in process, August 31	1800	1800	1080
Total units to be assigned costs		34000	33720
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$124,100	$53,952
Total equivalent units		34000	33720
Cost per equivalent unit (2)		$3.65	$1.60
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1	4070	990	5060
Costs incurred in August	124100	53952	178052
Total costs accounted for by the Roasting Department	128170	54942	183112
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance	4070	990	5060
To complete inventory in process, August 1	$	704	704
Cost of completed August 1 work in process	4070	1694	5764
Started and completed in August	$117,530	$51,520	$169,050
Transferred to finished goods in August (3)			174814
Inventory in process, August 31 (4)	6570	1728	8298
Total costs assigned by the Roasting Department			183112

b)

	Inc or Dec	amount
Change in DM cost per eq. unit	decrease	3.7-3.65=0.05
Change in conver cost per eq. unit	increase	1.5-1.6=-0.1