Question

Cost of Production Report The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginnie of the process. Work in process, January 1, 7,200 units, 65% completed $72,576* *Direct materials (7,200 x $8.00) $57,600 Conversion (7,200 x 65% * $3.20) 14,976 $72,576 Materials added during January from Weaving Department, 110,800 units Direct labor for January $903,020 153,631 187,772 Factory overhead for January Goods finished during January (includes goods in process, January 1), 112,200 units Work in process, January 31, 5,800 units, 45% completed a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0. For the cost per equivalent unit computations, round your answers to two decimal places.

Answer 1

a.

Karachi Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended January 31
Unit Information
Units charged to production:
Inventory in process, January 1			7200
Received from weaving Department			110800
Total units accounted for by the Cutting Department			118000
Units to be assigned costs
		Equivalent units
	Whole Units	Direct materials	Conversion
Inventory in process, January 1	7200	0	2520
Started and completed in January	105000	105000	105000
Transferred to finished goods in January	112200	105000	107520
Inventory process January 31	5800	5800	2610
Total units to be assigned cost	118000	110800	110130
Cost Information
		Direct materials	Conversion
Total costs for January in Cutting Department		903020	341403
Total equivalent units		110800	110130
Cost per equivalent unit		8.15	3.10
Costs ssigned to production:
	Direct materials	Conversion	Total
Inventory in process, January 1			72576
Cost incurred in January			1244423
Total costs accounted for by the Cutting Department			1316999
Costs allocated to completed and partially completed units:
Inventory in process, January 1 balance			72576
To complete inventory in process January 1	0	7812	7812
Cost of completed January 1 work in process			80388
Started and completed in January	855750	325500	1181250
Transferred to finished goods in January			1261638
Inventory in process, January 31	47270	8091	55361
Total costs assigned by the Cutting Department			1316999

b.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit ($8.15 - $8.00)	Increase	$                      0.15
Change in conversion cost per equivalent unit ($3.20 - $3.10)	Decrease	$                      0.10