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, 1,100 pounds, 10% completed $4,917* *Direct materials (1,100 X $4.3) $4,730 Conversion (1,100 X 10% X $1.7) $187 $4,917 Coffee beans added during August, 34,000 pounds 144,500 Conversion costs during August 61,038 Work in process, August 31, 1,800 pounds, 40% completed ? Goods finished during August, 33,300 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 1,100 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 1,100 0 1,100 Started and completed in August 33,300 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			1100
Received from materials storeroom			34000
Total units accounted for by the Roasting Department			35100
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, August 1	1100	0	990
Started and completed in August	32200	32200	32200
Transferred to finished goods in August	33300	32200	33190
Inventory in process, August 31	1800	1800	720
Total units to be assigned costs	35100	34000	33910
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		144500	61038
Total equivalent units		34000	33910
Cost per equivalent unit		4.25	1.80
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			4917
Costs incurred in August			205538
Total costs accounted for by the Roasting Department			210455
Cost allocated to completed and partially completed units:
Inventory in process, August 1 balance			4917
To complete inventory in process, August 1	0	1782	1782
Cost of completed August 1 work in process			6699
Started and completed in August	136850	57960	194810
Transferred to finished goods in August			201509
Inventory in process, August 31	7650	1296	8946
Total costs assigned by the Roasting Department			210455
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=4.30-4.25
Change in conversion cost per equivalent unit	Increase	0.10	=1.80-1.70