Question

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:

ACCOUNT Work in Process—Roasting Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
July	1	Bal., 5,700 units, 1/5 completed					16,872
	31	Direct materials, 256,500 units	743,850				760,722
	31	Direct labor	143,900				904,622
	31	Factory overhead	35,930				940,552
	31	Goods transferred, 257,000 units			?
	31	Bal., ? units, 1/5 completed					?

Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing The rate used to allocate costs between completed and partially completed production.cost per equivalent units, round to two decimal places.

Hana 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
Received from materials storeroom
Total units accounted for by the Roasting Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1
Started and completed in July
Transferred to Packing Department in July
Inventory in process, July 31
Total units to be assigned costs
Cost Information
Cost per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
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			$
Costs 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 Molding Department in July			$
Inventory in process, July 31
Total costs assigned by the Roasting Department			$

Feedback

2. Assuming that the July 1 work in process inventory includes $15,960 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Decrease Increase	$
Change in conversion cost per equivalent unit	Decrease Increase	$

Answer 1

Hana 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			5700
Received from materials storeroom			256500
Total units accounted for by the Roasting Department			262200
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	5700	0	4560
Started and completed in July	251300	251300	251300
Transferred to Packing Department in July	257000	251300	255860
Inventory in process, July 31	5200	5200	1040
Total units to be assigned costs	262200	256500	256900
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		743850	179830
Total equivalent units		256500	256900
Cost per equivalent unit		2.90	0.70
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			16872
Costs incurred in July			923680
Total costs accounted for by the Roasting Department			940552
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			16872
To complete inventory in process, July 1	0	3192	3192
Cost of completed July 1 work in process			20064
Started and completed in July	728770	175910	904680
Transferred to Packing Department in July			924744
Inventory in process, July 31	15080	728	15808
Total costs assigned by the Roasting Department			940552
2
	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	Increase	0.10		=2.9-(15960/5700)
Change in conversion cost per equivalent unit	Decrease	0.10		=0.7-((16872-15960)/(5700*1/5))