Question

please answer a to e

EX 18-16 Cost of production report The debits to Work in Process--Roasting Department for St. Arbucks Coffee Company for July 2012, together with information concerning production, are as follows: $ 2,418* Work in process, July 1, 600 pounds, 20% completed *Direct materials (600 x $3.80) Conversion (600 x 20% < $1.15) $2,280 138 $2,418 82,800 27,480 Coffee beans added during July, 23,000 pounds Conversion costs during July Work in process, July 31, 1,000 pounds, 42% completed Goods finished during July, 22,600 pounds All direct materials are placed in process at the beginning of production. Prepare a cost of production report, presenting the following computations: a. Direct materials and conversion equivalent units of production for July, b. Direct materials and conversion costs per equivalent unit for July. C. Cost of goods finished during July. d. Cost of work in process at July 31, 2012. e. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (June).

Answer 1

St. Arbucks Coffee company
FIFO Method:
		Equivalent Units
		DM		Conversion costs
	Whole units	%	Units	%	Units
Opening WIP	600
Started	23000
Total Units to account for	23600
Opening WIP	600	0	0	80	480
Completed and tfd.	22000	100	22000	100	22000
Closing WIP	1000	100	1000	42	420
Total Units to account for ( EUP)	23600		23000		22900	Answer 1
1 -Cost Information
Costs to account for:	Materials	Conversion	Total
Op. WIP	2280	138	2418
Added during the period	82800	27480	110280
Total costs to account for	85080	27618	112698
Cost per EUP :-
Cost to be accounted for	82800	27480	110280
EUP	23000	22900
Cost per EUP	3.6	1.2	4.8	Answer 2
2 - Costs Accounted for:		Materials		Conversion	Total
Completed and tfd.
Opening WIP		2280		138	2418
Completed and tfd.	22000 * 3.6	79200	22480 * 1.2	26976	106176
Completed and tfd.		81480		27114	108594
Cl. WIP	1000 * 3.6	3600	420 *1.2	504	4104
Total costs accounted for		85080		27618	112698
Cost reconciliation schedule
Costs Accounted for:
Transferred out			108594	Answer 3
closing WIP
Materials		3600
Conversion costs		504	4104	Answer 4
Total costs			112698
Answer 5
Opening WIP contains Material cost of $ 2280 and 600 units were completed so mat. Cost p.u = 2280 / 600 = 3.8, there is a decrease this time
( 3.8 - 3.6 ) i.e $ 0.2
Conversion cost per unit = 138 / 120 = 1.15, there is an increase this time ( 1.2 - 1.15 ) i.e $ 0.05
Since the format was not available, the question has been solved through this format.