Question

Cost of Production Report Hana Coffee Company roasts and pads coffee beans. The process begin by placing coffee beans into the Roasting Department. From the Roasting Department coffee beans are the transferred to the Padong Department. The flowing is partial work in process account of the Roasting Department 31: ACCOUNT Work in Process-Roasting Department ACCOUNT NO Date Item Balance Debit Credit Debit Credit Tauly 1 Ba, 30.000 units, 10% completed 121,800 31 Direct materials, 155,000 units 620,000 741,300 31 Director 90,000 801.800 31 Factory overhead 33.272 165,072 31 Goods transferred, 149,000 units > 31 Bal 2 units, 45 completed Required: 1. Prepare a cost of production report, and identify the missing amounts for Work in Programount, when coming out the recent Hana Coffee Company Cost of Production Report-Roasting Department For the Month Ended July 31 Unit Information Units charged to productions Inventory in process, July 1 Received from materials toreroom Total units accounted for by the Roasting Department Units to be assigned costs Equivalent Whole Direct Units Material Conversion Inventory process, July 1 Started and completed in July Transferred to Packing Department in Inventory in process, July 31

Answer 1

1			Hana coffee company
			Cost of Production Report-Roasting Department
			For the Month Ended July 31
		Unit information					Units
	Units charged to production:
	Inventory in process,July 1						30000
	Received from materials storeroom						155000
	Total units accounted for by the roasting department						185000
	Units to be assigned cost:
						Equivalent units
					Whole units	Direct materials	Conversion
	Inventory in process,July 1				30000	0	27000
						30000*(100%-100%)	30000*(100%-10%)
	Started and completed in July			(149000-30000)	119000	119000	119000
						(119000*100%)	(119000*100%)
	Transferred to packing department in July				149000	119000	146000
	Inventory in process,July 31			(185000-149000)	36000	35000	15750
						(35000*100%)	(35000*45%)
	Total units to be assigned costs				185000	154000	161750
						Direct materials	Conversion
	Total costs for July in roasting department				a	620000	123272
							(90000+33272)
	Total equivalent units				b	154000	161750
	Cost per equivalent unit				a/b	4.03	0.76
	Cost assigned to production:
						Direct materials	Conversion	Total
	Inventory in process,July 1							121800
	Costs incurred in July			(620000+90000+33272)				743272
	Total costs accounted for by the roasting department							865072
	Costs allocated to completed and partially completed units:
	Inventory in process,July 1 balance							121800
	To complete inventory in process,July 1 balance					0	20520	20520
						(0*4.03)	(27000*0.76)
	Cost of completed July 1 work in process							142320
	Started and completed in July					479570	90440	570010
						(119000*4.03)	(119000*0.76)
	Transferred to packing department in July							712330
	Inventory in process,July 31					141050	11970	153020
						(35000*4.03)	(15750*0.76)
	Total costs assigned by the roasting department							865350
	(Difference in total cost is due to round off of cost per equivalent unit)

DEBIT ACCOUNT Work in Process-Rosting Department BALANCE DATE ITEM POST. REF. Sept. 1 Bal., 30000 units, 10% completed Sept. 30 Direct materials, 155000 units Sept. 30 Direct labor Sept. 30 Factory overhead Sept. 30 Goods transferred,149000 units (Ref cost of production report) Sept. 30 Bal., 36000 units,45% completed (Difference is due to round off of cost per equivalent unit) ACCOUNT NO. Balance CREDIT DEBIT CREDIT 121800 620000 741800 90000 831800 33272 865072 712330 152742 153020 2 Cost per equivalent unit for the previous month: Balance=30000 units,10% completed Direct materials: Cost per equivalent unit=119400/30000=$ 3.98 Conversion: Cost per equivalent unit=(121800-119400)/(30000*10%)=$ 0.80 Increase or decrease Change in direct materials cost per equivalent unit Amount Increase 0.05 (4.03-3.98) Change in conversion cost per equivalent unit Decrease 0.04 (0.80-0.76)