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Cost of Production Report

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, 1,200 pounds, 50% completed				$5,880*
	*Direct materials (1,200 X $4.1)	$4,920
	Conversion (1,200 X 50% X $1.6)	960
		$5,880
Coffee beans added during August, 38,000 pounds				153,900
Conversion costs during August				63,240
Work in process, August 31, 2,000 pounds, 30% completed				?
Goods finished during August, 37,200 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
Cost 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
Units charged to production:
Inventory in process, August 1			1200
Received from materials storeroom			38000
Total units accounted for by the Roasting Department			39200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1	1200	0	600
Started and completed in August	36000	36000	36000
Transferred to finished goods in August	37200	36000	36600
Inventory in process, August 31	2000	2000	600
Total units to be assigned costs	39200	38000	37200
Cost Information
Cost per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$153900	$63240
Total equivalent units		38000	37200
Cost per equivalent unit (2)		$4.05	$1.70
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1	4920	960	$5880
Costs incurred in August	153900	63240	217140
Total costs accounted for by the Roasting Department	158820	64200	$223020
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$5880
To complete inventory in process, August 1	$0	$1020	1020
Cost of completed August 1 work in process			$6900
Started and completed in August			207000
Transferred to finished goods in August (3)			$213900
Inventory in process, August 31 (4)			9120
Total costs assigned by the Roasting Department			$223020

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	Decrease	$0.05
Change in conversion cost per equivalent unit	Increase	$0.10