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					13,688
	31	Direct materials, 261,000 units	548,100				561,788
	31	Direct labor	104,900				666,688
	31	Factory overhead	26,180				692,868
	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
Cost per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$
Costs incurred in July
Total costs accounted for by the Roasting Department			$
Costs 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 $11,600 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

Answer 1.
HANA COFFEE COMPANY
Cost of Production Report - Casting Department
For the Month ended July 31
Particulars		Equivalent Units
	Physical Units	Materials	Conversion Costs
Units Information
Units Charged to Production
Work in process - Beginning	5,800
Started into production	261,000
Total units	266,800
Units accounted for
Goods Units Completed & transferred out:
From Beginning WIP	5,800	-	2,320
(0% materials, 40% conversion costs)	.
Started & Completed (261,000 -5,800)	255,200	255,200	255,200
Work in process, Ending (266,800 - 261,000)	5,800	5,800	4,640
(100% materials, 80% conversion costs)
Equivalent units accounted for	266,800	261,000	262,160
	Materials	Conversion Costs	Total
Total Cost to Account for:
WIP, Beginning			13,688
Cost added in current period	548,100	131,080	679,180
Total cost to be account for	548,100	131,080	692,868
Cost added in current period	548,100	131,080	679,180
Equivalent Units of work done in current Period	261,000	262,160
Cost per Equivalent Unit	2.10	0.50	2.60
Assignment of Costs:
Goods Units and Completed out (6,800 Units)
WIP, Beginning - 5,800 Units	-	-	13,688
Cost added to Beg. WIP in Current period	-	1,160	1,160
		(2,320 Units X $0.50)
Total of Beginning Inventory	-	1,160	14,848
Started and completed - 255,200 Units	535,920	127,600	663,520
	(255,200 units X $2.10)	(255,200 units X $0.50)
Total Cost of good units completed & transferred out	535,920	128,760	678,368
WIP, Ending - 5,800 Units	12,180	2,320	14,500
	(5,800 units X $2.10)	(5,800 units X $0.50)
Total Cost accounted For	548,100	131,080	692,868
Answer 2.
Calculation of Cost per Unit -Beginning
	Materials	Conversion Costs	Total
WIP - Beginning	11,600	2,088	13,688
Equivalent No. of Unit - WIP - Beginning	5,800	3,480
Cost pet Equivalent Unit	2.00	0.60	2.60
	Materials	Conversion Costs	Total
Cost per Equivalent Unit - Beginning Inventory	2.00	0.60	2.60
Cost per Equivalent Unit - July 31	2.10	0.50	2.60
Increase (Decrease) in Cost per Unit	0.10	(0.10)	-