Question

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				$6,360*
	*Direct materials (1,200 X $4.4)	$5,280
	Conversion (1,200 X 50% X $1.8)	$1,080
		$6,360
Coffee beans added during August, 38,000 pounds				165,300
Conversion costs during August				71,060
Work in process, August 31, 2,000 pounds, 40% 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:

1. Direct materials and conversion equivalent units of production for August
2. Direct materials and conversion costs per equivalent unit for August
3. Cost of goods finished during August
4. 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
Costs 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

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			1200
Received from materials storeroom			38000
Total units accounted for by the Roasting Department			39200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	1200	0	600
Started and completed in August	36000	36000	36000
Transferred to finished goods in August	37200	36000	36600
Inventory in process, August 31	2000	2000	800
Total units to be assigned costs	39200	38000	37400
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		165300	71060
Total equivalent units		38000	37400
Cost per equivalent unit		4.35	1.90
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			6360
Costs incurred in August			236360
Total costs accounted for by the Roasting Department			242720
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			6360
To complete inventory in process, August 1	0	1140	1140
Cost of completed August 1 work in process			7500
Started and completed in August	156600	68400	225000
Transferred to finished goods in August			232500
Inventory in process, August 31	8700	1520	10220
Total costs assigned by the Roasting Department			242720
b
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=4.40-4.35
Change in conversion cost per equivalent unit	Increase	0.10	=1.90-1.80