Question

PR 20-2B Cost of production report Bavarian Chocolate Company processes chocolate into candy bars. The process begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Depart- ment. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the Molding Department, where the milk chocolate is formed into candy bars. The following is a partial work in process account of the Blending Department at October 31 OBJ. 2,4 ACCOUNT Work in Process-Blending Department ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Oct. Bal., 2,300 units, s completed 31 Direct materials, 26,000 units 31 Direct labor 31 Factory overhead 31 Goods transferred, 25,700 units 31 Bal.,2 units,⅓ completed 46,368 475,368 575,928 624,408 429,000 100,560 48,480 Instructions I. Prepare a cost of production report and identify the missing amounts for Work in Process-Blending Department. 2. Assuming that the October1 work in process inventory includes direct materials of $38,295, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between September and October

Answer 1

Bavarian Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended October 31
Unit Information
Units charged to production:
Inventory in process, October 1			2300
Received from materials storeroom			26000
Total units accounted for by the Blending Department			28300
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, October 1	2300	0	920
Started and completed in October	23400	23400	23400
Transferred to Molding Department in October	25700	23400	24320
Inventory in process, October 31	2600	2600	520
Total units to be assigned costs	28300	26000	24840
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for October in Blending Department		429000	149040
Total equivalent units		26000	24840
Cost per equivalent unit		16.50	6.00
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, October 1			46368
Costs incurred in October			578040
Total costs accounted for by the Blending Department			624408
Cost allocated to completed and partially completed units:
Inventory in process, October 1 balance			46368
To complete inventory in process, October 1	0	5520	5520
Cost of completed October 1 work in process			51888
Started and completed in October	386100	140400	526500
Transferred to Molding Department in October			578388
Inventory in process, October 31	42900	3120	46020
Total costs assigned by the Blending Department			624408
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease	0.15		=16.5-(38295/2300)
Change in conversion cost per equivalent unit	Increase	0.15		=6-((46368-38295)/(2300*3/5))