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., 7,300 units, 1/5 completed					16,352
	31	Direct materials, 328,500 units	722,700				739,052
	31	Direct labor	157,900				896,952
	31	Factory overhead	39,440				936,392
	31	Goods transferred, 329,000 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 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

1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

2. Assuming that the July 1 work in process inventory includes $15,330 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. If required, round your answers to the nearest cent.

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

Answer 1

00 D A B C 1 Hana Coffee Company 2 Cost of Production Report-Roasting Department 3 For the Month Ended July 31 4 Unit Information 5 Units charged to production: 6 Inventory in process, July 1 7,300 7 Received from materials storeroom 328,500 8 Total units accounted for by the Roasting Department 335,800 9 Units to be assigned costs: 10 Equivalent Units 11 Whole Units Direct Materials Conversion 12 Inventory in process, July 1 7,300 5,840 13 Started and completed in July 321,700 321,700 321,700 14 Transferred to Packing Department in July 329,000 321,700 327,540 15 Inventory in process, July 31 6,800 6,800 1,360 16 Total units to be assigned costs 335,800 328,500 328,900 17 Cost Information 18 Costs per equivalent unit: 19 Direct Materials Conversion 20 Total costs for July in Roasting Department $ 722,700 $ 197,340 21 Total equivalent units 328,500 328,900 22 Cost per equivalent unit $ 2.20$ 0.60 23 Costs charged to production: 24 Direct Materials Conversion Total

$ 16,352 $ 920,040 $ 936,392 $ $ $ 707,740$ 25 Inventory in process, July 1 26 Costs incurred in July 27 Total costs accounted for by the Roasting Department 28 Cost allocated to completed and partially completed units: 29 Inventory in process, July 1 balance 30 To complete inventory in process, July 1 31 Cost of completed July 1 work in process 32 Started and completed in July 33 Transferred to Packing Department in July 34 Inventory in process, July 31 35 Total costs assigned by the Roasting Department 36 37 2) 38 Cost of beginning work in process 39 Equivalent units 40 Cost per equivalent unit 41 16352 3,504 $ 3,504 $ 19,856 193,020 $ 900,760 $ 920,616 816 $ 15,776 $ 936,392 $ 14,960$ Direct Materials Conversion $ 15,330 $ 1,022 7300 1460 $ 2.10 $ 0.70 Increase or Amount 42 Decrease Increase Decrease 43 Change in direct materials cost per equivalent unit 44 Change in conversion cost per equivalent unit 0.10 $ $ 0.10

B D N 4 A B с 1 Hana Coffee Company Cost of Production Report-Roasting Department 3 For the Month Ended July 31 Unit Information 5 Units charged to production: 6 Inventory in process, July 1 7300 7 Received from materials storeroom 328500 8 Total units accounted for by the Roasting Department =+D6+D7 9 Units to be assigned costs: 10 Equivalent Units 11 Whole Units Direct Materials Conversion 12 Inventory in process, July 1 7300 0 =+B12*(1-1/5) 13 Started and completed in July =+B14-B12 =+B13*100% =+B13*100% 14 Transferred to Packing Department in July 329000 =+C12+C13 =+D12+D13 15 Inventory in process, July 31 =+B16-B14 =+B15*100% =+B15*1/5 16 Total units to be assigned costs =+D8 =+C14+C15 =+D14+D15 17 Cost Information 18 Costs per equivalent unit: 19 Direct Materials Conversion 20 Total costs for July in Roasting Department 722700 =157900+39440 21 Total equivalent units =+C16 =+D16 22 Cost per equivalent unit =+C20/021 =+D20/D21 23 Costs charged to production: 24 Direct Materials Conversion Total

16352 =+C20+D20 =+D25+D26 16352 25 Inventory in process, July 1 26 Costs incurred in July 27 Total costs accounted for by the Roasting Department 28 Cost allocated to completed and partially completed units: 29 Inventory in process, July 1 balance 30 To complete inventory in process, July 1 31 Cost of completed July 1 work in process 32 Started and completed in July 33 Transferred to Packing Department in July 34 Inventory in process, July 31 35 Total costs assigned by the Roasting Department =+C12*C22 =+D12*D22 =+B30+C30 =+D29+D30 =+C13*C22 =+D13*D22 =+B32+C32 =+D31+D32 =+C15 C22 =+D15*D22 =+B34+C34 =+D33+D34 36 37 2) 38 Cost of beginning work in process 39 Equivalent units 40 Cost per equivalent unit 41 Direct Materials 15330 =7300*100% =+B38/B39 Conversion 1=16352-B38 =7300*1/5 =+C38/C39 Increase or Amount Decrease 42 43 Change in direct materials cost per equivalent unit 44 Change in conversion cost per equivalent unit Increase =2.2-2.1 1=0.7-0.6 Decrease