Question

Cost of Production Report

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., 5,800 units, 3/5 completed					17,284
	31	Direct materials, 261,000 units	678,600				695,884
	31	Direct labor	146,800				842,684
	31	Factory overhead	36,712				879,396
	31	Goods transferred, 261,000 units			?
	31	Bal., ? units, 4/5 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			$

Feedback

1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

2. Assuming that the July 1 work in process inventory includes $14,500 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	Increase	$
Change in conversion cost per equivalent unit	Decrease	$

Answer 1

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			5800
Received from materials storeroom			261000
Total units accounted for by the Roasting Department			266800
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	5800	0	2320
Started and completed in July	255200	255200	255200
Transferred to Packing Department in July	261000	255200	257520
Inventory in process, July 31	5800	5800	4640
Total units to be assigned costs	266800	261000	262160
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		678600	183512
Total equivalent units		261000	262160
Cost per equivalent unit		2.6	0.7
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			17284
Costs incurred in July			862112
Total costs accounted for by the Roasting Department			879396
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			17284
To complete inventory in process, July 1	0	1624	1624
Cost of completed July 1 work in process			18908
Started and completed in July	663520	178640	842160
Transferred to Packing Department in July			861068
Inventory in process, July 31	15080	3248	18328
Total costs assigned by the Roasting Department			879396
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.1
Change in conversion cost per equivalent unit	Decrease	0.1