Question

Cost of Production Report

The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.

Work in process, January 1, 12,200 units, 75% completed $132,065*
    *Direct materials (12,200 × $7.6) $92,720
    Conversion (12,200 × 75% × $4.3) 39,345
$132,065
Materials added during January from Weaving Department, 188,000 units $1,457,000
Direct labor for January 364,419
Factory overhead for January 445,401
Goods finished during January (includes goods in process, January 1), 190,200 units —
Work in process, January 31, 10,000 units, 30% completed —

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the The rate used to allocate costs between completed and partially completed production.cost per equivalent unit computations, round your answers to two decimal places.

Karachi Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended January 31
Unit Information
Units charged to production:
Inventory in process, January 1
Received from Weaving Department
Total units accounted for by the Cutting 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 cost
Cost Information
Cost per equivalent unit:
Direct Materials Conversion
Total costs for January in Cutting Department $ $
Total equivalent units
Cost per equivalent unit $ $
Costs assigned to production:
Direct Materials Conversion Total
Inventory in process, January 1 $
Costs incurred in January
Total costs accounted for by the Cutting Department $
Costs 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 Cutting Department $

Feedback

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places.

Increase or Decrease Amount
Change in direct materials cost per equivalent unit Increase

Decrease
Increase

$
Change in conversion cost per equivalent unit Increase

Decrease
Increase

$

Answer 1

Karachi Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended January 31
Unit Information
Units charged to production:
Inventory in process, January 1			12200
Received from Weaving Department			188000
Total units accounted for by the Cutting Department			200200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, January 1	12200	0	3050
Started and completed in January	178000	178000	178000
Transferred to Packing Department in January	190200	178000	181050
Inventory in process, January 31	10000	10000	3000
Total units to be assigned costs	200200	188000	184050
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for January in Cutting Department		1457000	809820
Total equivalent units		188000	184050
Cost per equivalent unit		7.75	4.4
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, January 1			132065
Costs incurred in January			2266820
Total costs accounted for by the Cutting Department			2398885
Cost allocated to completed and partially completed units:
Inventory in process, January 1 balance			132065
To complete inventory in process, January 1	0	13420	13420
Cost of completed January 1 work in process			145485
Started and completed in January	1379500	783200	2162700
Transferred to Packing Department in January			2308185
Inventory in process, January 31	77500	13200	90700
Total costs assigned by the Cutting Department			2398885
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.15	=7.75-7.6
Change in conversion cost per equivalent unit	Increase	0.1	=4.4-4.3