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, 500 pounds, 10% completed				$1,610*
	*Direct materials (500 X $3.1)	$1,550
	Conversion (500 X 10% X $1.2)	$60
		$1,610
Coffee beans added during August, 16,000 pounds				48,800
Conversion costs during August				21,073
Work in process, August 31, 800 pounds, 70% completed				?
Goods finished during August, 15,700 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 5 Units charged to production: 6 Inventory in process, August 1 500 7 Received from materials storeroom 16000 8 Total units accounted for by the Roasting Department 16500 9 Units to be assigned costs: Equivalent Units Whole Units Direct Materials (1) Conversion (1) 12 Inventory in process, August 1 500 450 13 Started and completed in August 15200 15200 15200 14 Transferred to finished goods in August 157001 15200 15650 15 Inventory in process, August 31 800 560 16 Total units to be assigned costs 16500 16000 16210 17 Cost Information 18 Costs per equivalent unit: 10 800

Direct Materials Conversion $ 48,800 $ 21,073 16000 16210 $ 3.05 $ 1.30 Direct Materials Conversion Total $ $ $ 1,610 69,873 71,483 20 Total costs for August in Roasting Department 21 Total equivalent units 22 Cost per equivalent unit (2) 23 Costs assigned to production: 24 25 Inventory in process, August 1 26 Costs incurred in August 27 Total costs accounted for by the Roasting Department 28 Costs allocated to completed and partially completed units: 29 Inventory in process, August 1 balance 30 To complete inventory in process, August 1 31 Cost of completed August 1 work in process 32 Started and completed in August 33 Transferred to finished goods in August (3) 34 Inventory in process, August 31 (4) 35 Total costs assigned by the Roasting Department - $ 585$ S $ 46,360 $ 1,610 585 2,195 66,120 68,315 3,168 71,483 $ 2,440 19,760$ IS 728$ $ $

Morning Brew Coffee Company Cost of Production Report-Roasting Department For the Month Ended August 31 Unit Information 5 Units charged to production: 6 Inventory in process, August 1 500 7 Received from materials storeroom 16000 8 Total units accounted for by the Roasting Department =+B6+B7 9 Units to be assigned costs: 10 Equivalent Units 11 Whole Units Direct Materials (1) Conversion (1) 12 Inventory in process, August 1 500 =+B12* (100%-100%) =+B12*(100%-10%) 13 Started and completed in August =16000-800 =+B13*100% =+B13*100% 14 Transferred to finished goods in August =+B12+B13 =+C12+C13 =+D12+D13 15 Inventory in process, August 31 800 =+B15*100% =+B15*70% 16 Total units to be assigned costs =+B14+B15 =+C14+C15 =+D14+D15 17 Cost Information 18 Costs per equivalent unit:

19 20 Total costs for August in Roasting Department 21 Total equivalent units 22 Cost per equivalent unit (2) 23 Costs assigned to production: Direct Materials 48800 =+C16 =+C20/C21 Conversion 21073 =+D16 =+D20/D21 24 Direct Materials Conversion Total 1610 -48800+21073 =+D25+D26 25 Inventory in process, August 1 26 Costs incurred in August 27 Total costs accounted for by the Roasting Department 28 Costs allocated to completed and partially completed units: 29 Inventory in process, August 1 balance 30 To complete inventory in process, August 1 31 Cost of completed August 1 work in process 32 Started and completed in August 33 Transferred to finished goods in August (3) 34 Inventory in process, August 31 (4) 35 Total costs assigned by the Roasting Department =+C12*C22 =+D12*D22 =+C13*C22 =+D13*D22 1610 =+B30+C30 =+D29+D30 =+B32+C32 =+D31+D32 =+B34+C34 =+D33+D34 =+C15 C22 =+D15*D22

А 2 Change in direct materials cost per equivalent unit 3 Change in conversion cost per equivalent unit Increase or Decrease Amount Decrease 0.05 Increase 0.1

A 2 Change in direct materials cost per equivalent unit 3 Change in conversion cost per equivalent unit Increase or Decrease Amount Decrease =3.1-3.05 |=1.3-1.2