Question

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., 6,500 units, 4/5 completed					17,290
	31	Direct materials, 292,500 units	643,500				660,790
	31	Direct labor	139,300				800,090
	31	Factory overhead	34,820				834,910
	31	Goods transferred, 293,000 units			?
	31	Bal., ? units, 2/5 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 two decimal places.

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
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs charged 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 Molding 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 $13,650 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and 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

On FIFO basis
Hana Coffee Company
Cost of Production Report-Roasting Department(FIFO)
For the Month Ended July 31
Unit Information
Units charged to production:
Inventory in process, July 1			6500
Received from materials storeroom			292500
Total units accounted for by the Roasting Department			299000
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	6500		1300
Started and completed in July	286500	286500	286500
Transferred to Packing Department in July	293000
Inventory in process, July 31	6000	6000	2400
Total units to be assigned costs		292500	290200
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		643500	174120
Total equivalent units		292500	290200
Cost per equivalent unit		2.2	0.6
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			17290
Costs incurred in July
Total costs accounted for by the Roasting Department	643500	174120	817620
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			17290
To complete inventory in process, July 1	0	780	780
Cost of completed July 1 work in process	0	780	18070
Started and completed in July	630300	171900	802200
Transferred to Molding Department in July	630300	172680	820270
Inventory in process, July 31	13200	1440	14640
Total costs assigned by the Roasting Department	643500	174120	834910
2. Assuming that the July 1 work in process inventory includes $13,650 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and 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		$
Note : There will be no change in cost per equivalent unit as it is found out by considering costs incurred in July and not of june.