Question

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., 30,000 units, 10% completed 121,800 31 Direct materials, 155,000 units 620,000 741,800 31 Direct labor 90,000 831,800 31 Factory overhead 33,272 865,072 31 Goods transferred, 149,000 units ? 31 Bal., ? units, 45% 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 the nearest cent. 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 Packing 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 $119,400 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. If required, round your answers to two decimal places. Increase or Decrease Amount Change in direct materials cost per equivalent unit $ Change in conversion cost per equivalent unit $

Answer 1

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			30000
Received from materials storeroom			155000
Total units accounted for by the Roasting Department			185000
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	30000	0	27000
Started and completed in July	119000	119000	119000
Transferred to Packing Department in July	149000	119000	146000
Inventory in process, July 31	36000	36000	16200
Total units to be assigned costs	185000	155000	162200
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		620000	123272
Total equivalent units		155000	162200
Cost per equivalent unit		4	0.76
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			121800
Costs incurred in July			743272
Total costs accounted for by the Roasting Department			865072
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			121800
To complete inventory in process, July 1	0	20520	20520
Cost of completed July 1 work in process			142320
Started and completed in July	476000	90440	566440
Transferred to Packing Department in July			708760
Inventory in process, July 31	144000	12312	156312
Total costs assigned by the Roasting Department			865072
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.02
Change in conversion cost per equivalent unit	Decrease	0.04

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