Question

Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.

The balance in the account Work in Process—Filling was as follows on January 1:

Work in Process—Filling Department (3,700 units, 60% completed):

Direct materials (3,700 x $11.40) $42,180

Conversion (3,700 x 60% x $7.40) 16,428 $58,608

The following costs were charged to Work in Process—Filling during January:

Direct materials transferred from Reaction Department: 47,700 units at $11.20 a unit $534,240

Direct labor 182,680

Factory overhead 175,508

During January, 47,300 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 4,100 units, 50% completed.

Required: 1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places.

Dover Chemical Company Cost of Production Report-Filling Department For the Month Ended January 31

Unit Information Units charged to production:

Inventory in process, January 1

Received from Reaction Department

Total units accounted for by the Filling Department

Units to be assigned costs:

Equivalent Units

Whole Units Direct Materials Conversion

Inventory in process, January 1

Started and completed in January

Transferred to finished goods in January

Inventory in process, January 31

Total units to be assigned costs

Cost Information

Costs per equivalent unit:

Direct Materials Conversion

Total costs for January in Filling Department $ $

Total equivalent units

Cost per equivalent unit $ $

Costs charged to production:

Direct Materials Conversion Total

Total Inventory in process, January 1 $

Costs incurred in January

Total costs accounted for by the Filling Department $

Cost allocated to completed and partially completed units:

Inventory in process, January 1 balance $

To complete inventory in process, January 1 $ $

Cost of completed January 1 work in process $

Started and completed in January

Transferred to finished goods in January $

Inventory in process, January 31

Total costs assigned by the Filling Department $

2. Journalize the entries for

(1) costs transferred from Reaction to Filling and (2) the costs transferred from Filling to Finished Goods.

(1)

(2)

3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places.

Increase or Decrease Amount

Change in direct materials cost per equivalent unit $

Change in conversion cost per equivalent unit

4. The cost of production report may be used as the basis for allocating product costs between and . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.

Answer 1

Answer:- 1. Dover chemical company

Cost of production report - filling department

For the month ended on 31 January

Unit information

Unit charged to production

Inventory in process January 1. $3700

Received from reaction department. $47700

Total units accounted for by the filling

Department. $51400

Units to be assigned to:-

Whole Direct   

Units materials conversion

Inventory in $3700. 0. $1480*

process (January 1)

Starting and completed

In January $47300. $47300. $47300

Transferred to finished

Good in January. $51000. $47300. $48780

Inventory and process

January 31 50%. 4100. 4100. 2050

Total unit to be assigned

Cost. $55100. $51400. $50830

Working note :-

1.* 3700(1-60%) = $1480

2. ** 51400-4100 = $47300

3. ***4100× 50%=$2050

Cost Direct. Conversion. Total

Material

Cost per equivalent unit

Total cost for January in filling

Department. $534240 $358188

Total equivalent units. ÷$51400. ÷ $50830

Cost per equivalent unit. $10.39 $7.40

Cost charged to production :-

Inventory in process January 1. $58608

Cost incurred in January. $892428

Total cost accounted for by the filling department. $951036

Cost allocated to completed and partially completed units :-

Inventory in process January 1 $58608

To complete inventory in process

1 January. $0. $10952. $10952

Cost of completed

work in process. $69560

Started and $491447. $42599. $1020596

completed in january

Transferred to finished

Goods. $1020596

Inventory in

Process. $42599. $15170. $0

Total cost assigning by the

Filling department. $1020597

Working note:-

4. 1480× 7.40 = $10952

5.$47300 × 10.39 = $491447

6. $47300 ×7.40 = $350020

7.$182680+$175508+ $534240= $ 892428

8.$182680+ $175508=$358188

9.4100 × 10.39 = $42599

10. $2050 × 7.40= $15170

Answer 2.

1. Work in process.

-fillingdepartment. $534240

Work in process

-reaction department $534240

2. Finished goods. $1020597

Work in process

- filling department. $1020597

Answer 3:- Direct material = -1.01 decrease(11.40-10.39)

Conversion = 7.40-7.40 =0