Question

1. Cost of Production Report: Average Cost Method

   Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:

   ACCOUNT Work in Process-Roasting Department					ACCOUNT NO.
   Date		Item	Debit		Credit	Balance
   						Debit		Credit
   Dec.	1	Bal., 19,000 units, 25% completed				88,540
   	31	Direct materials, 328,700 units	871,055			959,595
   	31	Direct labor	494,279			1,453,874
   	31	Factory overhead	711,278.5			2,165,152.5
   	31	Goods transferred, 331,600 units			?	?
   	31	Bal., ? units, 75% completed				?

   Required:

   Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department. If required, round your cost per equivalent unit answer to two decimal places.

   Sunrise Coffee Company
   Cost of Production Report-Roasting Department
   For the Month Ended December 31
   Unit Information
   Units charged to production:
   Inventory in process, December 1
   Received from materials storeroom
   Total units accounted for by the Roasting Department
   Units to be assigned costs:
   	Whole Units	Equivalent Units of Production
   Transferred to Packing Department in December
   Inventory in process, December 31
   Total units to be assigned costs
   Cost Information
   Cost per equivalent unit:
   		Costs
   Total costs for December in Roasting Department		$
   Total equivalent units
   Cost per equivalent unit		$
   Costs assigned to production:
   Inventory in process, December 1		$
   Costs incurred in December
   Total costs accounted for by the Roasting Department		$
   Costs allocated to completed and partially completed units:
   Transferred to Packing Department in December		$
   Inventory in process, December 31
   Total costs assigned by the Roasting Department		$

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Answer 1

Solution:

Sunrise Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended December 31
Units Information
Units charged to production:
Inventory in process, December 1	19000
Received from Materials storeroom	328700
Total units accounted for by the Roasting Department	347700
	Whole Units	Equivalent units
Units to be assigned costs:
Transferred to Packing Department in December	331600	331600
Inventory in process, December 31 (75% completed)	16100	12075
Total units to be assigned costs	347700	343675
COSTS Information
		Costs
Cost per equivalent unit:
Total costs for December in Roasting Department		$46,67,161.50
/Total equivalent units		343675
Cost per equivalent unit		$13.58
Costs assigned to production:
Inventory in process, December 1		$88,540
Costs incurred in December		$45,78,621.50
Total costs accounted for by the Roasting Department		$46,67,161.50
Costs allocated to completed and partially completed units:
Transferred to Packing department in December		$45,03,128
Inventory in process, December 31		$1,63,979
Total costs assigned by the Roasting Department		$46,67,106.50