Question

In: Accounting

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with...

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

Solutions

Expert Solution

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

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