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, 1,200 pounds, 50% completed				$5,460*
	*Direct materials (1,200 X $3.8)	$4,560
	Conversion (1,200 X 50% X $1.5)	900
		$5,460
Coffee beans added during August, 38,000 pounds				142,500
Conversion costs during August				60,800
Work in process, August 31, 2,000 pounds, 70% completed				?
Goods finished during August, 37,200 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
Cost 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

Answer:
	Morning Brew Coffee Company
	Cost of Production Report-Roasting Department
	For the Month Ended August 31
1	Unit Information
	Units to account for
	Beginning Inventory	1,200
	Units started during Feburary	38,000
	Total units to account for	39,200
	Total units accounted for
	Units completed and transferred out	37,200
	Ending Inventory	2,000
	Total units accounted for	39,200
2	Equivalent units of production-Weighted average method
				(unit*% Material)		(unit*% Labour)
a		Units	% Material	EUP-Material	% Labour	EUP-Labour
	Units completed and transferred out	37,200	100%	37,200	100%	37,200
	Ending Inventory	2,000	100%	2,000	70%	$        1,400
	Equivalent Units of conversion			39,200		38,600
	Cost per Unit		Material		Labour		Total
	Cost of beginning work in progress		$                                      4,560		$            900		$           5,460
	Cost incurred during the year		$                                 1,42,500		$       60,800		$      2,03,300
i	Total Cost	Cost	$                                 1,47,060	Cost	$       61,700	Cost	$      2,08,760
ii	Equivalent Units of production	EUP	39,200	EUP	38,600	EUP
i*ii	Cost per Unit		$                                        3.75		₹           1.60
b	Cost of units finished and transferred out	aa	bb	aa*bb
		EUP	Cost per EUP	Total Cost
	Cost transferred out
	Direct material	37,200	$                                        3.75	$                1,39,557
	Labour Cost	37,200	$                                        1.60	$                   59,462
	Total transferred out			$                1,99,019
c	Cost of ending work in progress
	Direct material	2,000	$                                        3.75	$                      7,503
	Labour Cost ($1.60*70%)	2,000	$                                        1.12	$                      2,238
				$                      9,741
	Total Cost accounted for				$    2,08,760