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., 5,500 units, 2/5 completed					14,190
	31	Direct materials, 220,000 units	528,000				542,190
	31	Direct labor	106,300				648,490
	31	Factory overhead	26,600				675,090
	31	Goods transferred, 221,000 units			?
	31	Bal., ? units, 3/5 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 $12,650 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		$
Change in conversion cost per equivalent unit		$

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			5500
Received from materials storeroom			220000
Total units accounted for by the Roasting Department			225500
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials	Conversion
Inventory in process, July 1	5500	0	5500*3/5 = 3300
Started and completed in July	215500	215500	215500
Transferred to Packing Department in July	221000	215500	218800
Inventory in process, July 31	4500	4500	4500*3/5 = 2700
Total units to be assigned costs	225500	220000	221500
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$528000	132900
Total equivalent units		220000	221500
Cost per equivalent unit		$2.4	$0.60
Costs charged to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$14190
Costs incurred in July			660900
Total costs accounted for by the Roasting Department			$675090
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance			$14190
To complete inventory in process, July 1	$0	$1980	1980
Cost of completed July 1 work in process			$16170
Started and completed in July	517200	129300	646500
Transferred to Packing Department in July			$662670
Inventory in process, July 31	10800	1620	12420
Total costs assigned by the Roasting Department			$675090

2. Assuming that the July 1 work in process inventory includes $12,650 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