Question

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., 7,700 units, 3/5 completed					16,632
	31	Direct materials, 346,500 units	658,350				674,982
	31	Direct labor	137,500				812,482
	31	Factory overhead	34,410				846,892
	31	Goods transferred, 347,000 units			?
	31	Bal., ? units, 1/5 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
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 $13,860 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.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$
Change in conversion cost per equivalent unit		$

Answer 1

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			7700
Received from materials storeroom			346500
Total units accounted for by the Roasting Department			354200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	7700	0	3080
Started and completed in July	339300	339300	339300
Transferred to Packing Department in July	347000	339300	342380
Inventory in process, July 31	7200	7200	1440
Total units to be assigned costs	354200	346500	343820
Cost Information
Cost per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		658350	171910
Total equivalent units		346500	343820
Cost per equivalent unit		1.90	0.50
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			16632
Costs incurred in July			830260
Total costs accounted for by the Roasting Department			846892
Costs allocated to completed and partially completed units:
Inventory in process, July 1 balance			16632
To complete inventory in process, July 1 (3080 x $0.50)	0	1540	1540
Cost of completed July 1 work in process			18172
Started and completed in July (339300 x $1.90);(339300 x $0.50)	644670	169650	814320
Transferred to Packing Department in July			832492
Inventory in process, July 31 (7200 x $1.90);(1440 x $0.50)	13680	720	14400
Total costs assigned by the Roasting Department			846892

2.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	$                                     0.10
Change in conversion cost per equivalent unit	Decrease	$                                     0.10

Working:

	Direct Materials	Conversion
Cost per equivalent unit, July 31	$                               1.90	$                                     0.50
Cost per equivalent unit, July 1	$                               1.80	$                                     0.60
	($13860/7700)	[($16632-$13860)/4620*]
Increase (Decrease)	$                               0.10	$                                    -0.10

*7700 x 3/5 = 4620