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 packaging 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. Balance Date Item Debit Credit Credit Debit July 1 Bal., 7,400 units, 1/5 completed 15,688 31 Direct materials, 333,000 units 714,988 699,300 31 Direct labor 134,500 849,488 31 Factory overhead 883,168 33,680 31 Goods transferred, 334,000 units 31 Bal, 2 units, 3/5 completed Required: 1. Prepare a cost of production report, and identify the missing amounts for Work in Process-Roasti 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: Whole Units Direct Materials Conversion Inventory in process, July 1 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: Whole Units Direct Materials Conversion Inventory in process, July1 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: Conversion ot Inventory in process, Jly1 Costs incurmed in July al costs καreed for bybeRoasting Department Costs allocated to completed and partially completed units Inventory in process, July 1 balance To complete inventory in process, July 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. Caloulate the cost per equivalert nventory unit for direct materials and conversion between February and that the July 1 work in process inventory includes $14,800 of direct materials, Betermine the increase or decrease in the cost per equivalent u July. If required, round your answers to the nearest cent Increase or Decrease Amount Change in direct materials cost per equivalent unit Increase Decrease Change in conversion cost per equlvalent unit

Answer 1

Solution 1:

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			7400
Received from materials storeroom			333000
Total units accounted for by the Roasting Department			340400
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, July 1	7400	0	5920
Started and completed in August	326600	326600	326600
Transferred to finished goods in August	334000	326600	332520
Inventory in process, July 31	6400	6400	3840
Total units to be assigned costs	340400	333000	336360
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for July in Roasting Department		$699,300.00	$168,180.00
Total equivalent units		333000	336360
Cost per equivalent unit (2)		$2.10	$0.50
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, July 1			$15,688.00
Costs incurred in July	$699,300.00	$168,180.00	$867,480.00
Total costs accounted for by the Roasting Department			$883,168.00
Costs allocated to completed and partially completed units:
Inventory in process, July 1 balance			$15,688.00
To complete inventory in process, July 1	$0.00	$2,960.00	$2,960.00
Cost of completed July 1 work in process			$18,648.00
Started and completed in July	$685,860.00	$163,300.00	$849,160.00
Transferred to finished goods in July (3)			$867,808.00
Inventory in process, July 31 (4)	$13,440.00	$1,920.00	$15,360.00
Total costs assigned by the Roasting Department			$883,168.00

Solution 2:

Particulars	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit ($2.10 - $2.00)	Increase	$0.10
Change in conversion cost per equivalent unit ($0.60 - $0.50)	Decrease	$0.10