Output per month   Price   Total Revenue   Total Cost   Total Profit   Marginal
Revenue*   Marginal Cost*   Average Total Cost   Profit per Unit (Price Minus Average Cost)
0   $ 1,000     $ 0   $ 60,000   -$60,000   -   -   -   -
100   1,000   100,000   90,000   10,000   $ 1,000    $ 300   $900   $100
200   1,000   200,000   130,000   70,000   1,000   400   650   350
300   1,000   300,000   180,000   120,000   1,000   500   600   400
400   1,000   400,000   240,000   160,000   1,000   600   600   400
500   1,000   500,000   320,000   180,000   1,000   800   640   360
600   1,000   600,000   420,000   180,000   1,000   1,000   700   300
700   1,000   700,000   546,000   154,000   1,000   1,260   780   220
800   1,000   800,000   720,000   80,000   1,000   1,740   900   100
900   1,000   900,000   919,800   -19,800   1,000   1,998   1,022   -22
*Note that output levels are calibrated in hundreds in this example; that's why we have divided the change in total costs and revenues from one output level to another by 100 to calculate marginal revenue and marginal cost. Very few manufacturers deal in units of 1.

(a) What were the fixed costs of production for the firm?

$

(b) At what rate of output was profit per computer maximized? (Choose the highest output level.)

computers per month

(c) At what output rate was total profit maximized? (Choose the highest output level.)

computers per month

- Which of the following is an implicit cost of production?

a) the interest you pay your mother for the money she loaned you to start your business

b) the loss in the value of capital equipment due to wear and tear

c) the utility bill paid to water, electricity, and natural gas companies

d) the salary you pay yourself for running your business

- The minimum efficient scale is

a) the plant size that yields the most profit.

b) the smallest output level where the firm finally reaches productive efficiency.

c) the level of output where diminishing returns have not set in yet.

d) the smallest level of operation where long-run average costs are lowest.

- Which of the following statements is true?

a) Total cost = fixed cost + variable cost.

b) Total cost = fixed cost + implicit cost.

c) Variable cost = wages + salaries + benefits.

d) Opportunity cost = explicit cost - implicit cost.

PA3-1 Preparing a Process Costing Production Report (Weighted-Average Method) [LO 3-2, 3-3, 3-4]

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:

Required:
1 & 2. Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.  



b. Calculate the number of equivalent units.



c. Calculate the cost per equivalent unit. (Round cost per Equivalent Unit to 5 decimal places.)  



d. Reconcile the total cost of work in process.(Use Cost per Equivalent Unit rounded to 5 decimal places and round your final answers to the nearest whole dollar amount.)

PA3-1 Preparing a Process Costing Production Report (Weighted-Average Method) [LO 3-2, 3-3, 3-4]

Sandia Corporation manufactures metal toolboxes. It adds all materials at the beginning of the manufacturing process. The company has provided the following information:

Required:
1 & 2. Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.  



b. Calculate the number of equivalent units.



c. Calculate the cost per equivalent unit. (Round cost per Equivalent Unit to 5 decimal places.)  



d. Reconcile the total cost of work in process.(Use Cost per Equivalent Unit rounded to 5 decimal places and round your final answers to the nearest whole dollar amount.)

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:

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.

2. Assuming that the July 1 work in process inventory includes $16,800 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.

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, 900 pounds, 50% completed $4,635* *Direct materials (900 X $4.3) $3,870 Conversion (900 X 50% X $1.7) $765 $4,635 Coffee beans added during August, 28,000 pounds 119,000 Conversion costs during August 50,454 Work in process, August 31, 1,400 pounds, 70% completed ? Goods finished during August, 27,500 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 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

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., 4,300 units, 1/5 completed 13,674 31 Direct materials, 193,500 units 599,850 613,524 31 Direct labor 125,100 738,624 31 Factory overhead 31,236 769,860 31 Goods transferred, 194,000 units ? 31 Bal., ? units, 3/5 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 4,600 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 $

2. Assuming that the July 1 work in process inventory includes $12,900 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 $ Change in conversion cost per equivalent unit $

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:

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.

2. Assuming that the July 1 work in process inventory includes $15,340 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 the nearest cent.

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:

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.

2. Assuming that the July 1 work in process inventory includes $7,920 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 the nearest cent.

Cost of Production Report

Arabica Highland 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:

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.

2. Assuming that the July 1 work in process inventory includes $12,470 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 the nearest cent.

Cost of Production Report

Arabica Highland 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 31:4

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.

2. Assuming that the July 1 work in process inventory includes $21,900 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 the nearest cent.