Question

Cost of Production Report The debits to Work in Process—Roasting Department for St. Arbucks Coffee Company for July 2016, together with information concerning production, are as follows: Work in process, July 1, 1,200 pounds, 20% completed $4,416* *Direct materials (1,200 X $3.4) $4,080 Conversion (1,200 X 20% X $1.4) $336 $4,416 Coffee beans added during July, 38,000 pounds 127,300 Conversion costs during July 56,640 Work in process, July 31, 2,000 pounds, 40% completed ? Goods finished during July, 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: Direct materials and conversion equivalent units of production for July. Direct materials and conversion costs per equivalent unit for July. Cost of goods finished during July. Cost of work in process at July 31, 2016. If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places. St. Arbucks Coffee Company Cost of Production Report-Roasting Department For the Month Ended July 31, 2016 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 (1) Conversion (1) Inventory in process, July 1 Started and completed in July Transferred to finished goods in July Inventory in process, July 31 Total units to be assigned costs Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for July in Roasting Department $ $ Total equivalent units Cost per equivalent unit (2) $ $ 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 $ Cost 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 finished goods in July (3) $ Inventory in process, July 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 (June). 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

St. Arbucks 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			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	Conversion
Inventory in process, July 1	1200	0	960
Started and completed in July	36000	36000	36000
Transferred to finished goods in July	37200	36000	36960
Inventory in process, July 31	2000	2000	800
Total units to be assigned costs	39200	38000	37760
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		127300	56640
Total equivalent units		38000	37760
Cost per equivalent unit		3.35	1.50
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			4416
Costs incurred in July			183940
Total costs accounted for by the Roasting Department			188356
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			4416
To complete inventory in process, July 1	0	1440	1440
Cost of completed July 1 work in process			5856
Started and completed in July	120600	54000	174600
Transferred to finished goods in July			180456
Inventory in process, July 31	6700	1200	7900
Total costs assigned by the Roasting Department			188356
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.05	=3.4-3.35
Change in conversion cost per equivalent unit	Increase	0.10	=1.5-1.4