Question

Arabica Highland 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., 6,900 units, 1/5 completed					23,322
	31	Direct materials, 276,000 units	910,800				934,122
	31	Direct labor	177,900				1,112,022
	31	Factory overhead	44,484				1,156,506
	31	Goods transferred, 277,000 units			?
	31	Bal., ? units, 2/5 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.

Arabica Highland 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
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit		$	$
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$
Costs incurred in July
Total costs accounted for by the Roasting Department			$
Cost 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 Packing Department in July			$
Inventory in process, July 31
Total costs assigned by the Roasting Department			$

2. Assuming that the July 1 work in process inventory includes $22,080 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

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.

Arabica Highland 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			6900
Received from materials storeroom			276000
Total units accounted for by the Roasting Department			282900
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	6900	0	6900*4/5 = 5520
Started and completed in July	270100	270100	270100
Transferred to Packing Department in July	277000	270100	275620
Inventory in process, July 31	5900	5900	5900*2/5 = 2360
Total units to be assigned costs	282900	276000	277980
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$910800	$222384
Total equivalent units		276000	277980
Cost per equivalent unit		$3.3	$0.8
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$23322
Costs incurred in July			1133184
Total costs accounted for by the Roasting Department			$1156506
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			$23322
To complete inventory in process, July 1	$0	$4416	4416
Cost of completed July 1 work in process			27738
Started and completed in July			1107410
Transferred to Packing Department in July			$1135148
Inventory in process, July 31			21358
Total costs assigned by the Roasting Department			$1156506

2. Assuming that the July 1 work in process inventory includes $22,080 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	$0.10
Change in conversion cost per equivalent unit	Decrease	$0.10