Question

Equivalent Units and Related Costs; Cost of Production Report; Entries Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals. The balance in the account Work in Process-Filling was as follows on January 1: Work in Process-Filling Department (5,300 units, 60% completed): Direct materials (5,300 x $$10.2) $54,060 Conversion (5,300 x 60% x $6.5) 20,670 $74,730 The following costs were charged to Work in Process-Filling during January: Direct materials transferred from Reaction Department: 68,400 units at $9.9 a unit $677,160 Direct labor 229,470 Factory overhead 220,479 During January, 67,800 units of specialty chemicals were completed. Work in Process-Filling Department on January 31 was 5,900 units, 10% completed. Required: 1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places. Dover Chemical Company Cost of Production Report-Filling Department For the Month Ended January 31 Unit Information Units charged to production: Inventory in process, January 1 Received from Reaction Department Total units accounted for by the Filling Department Units to be assigned costs: Equivalent Units Whole Direct Materials Conversion Units Inventory in process, January 1 Started and completed in January Transferred to finished goods in January Inventory in process, January 31 Total units to be assigned costs Cost Information Cost per equivalent unit: Direct Materials Conversion Total costs for January in Filling Department Total equivalent units Cost per equivalent unit Costs assigned to production: Direct Materials Total Conversion Inventory in process, January 1 Costs incurred in January Total costs acCounted for by the Filling Department Costs allocated to completed and partially completed units: Inventory in process, January 1 balance To complete inventory in process, January 1 $ Cost of completed January 1 work in process Started and completed in January Transferred to finished goods in January Inventory in process, January 31 Total costs assigned by the Filling Department 2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods. Work in Process-Filling Department (1) Work in Process-Reaction Department Total costs assigned by the Filling Department 2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods Work in Process-Filling Department (1) Work in Process- Reaction Department Finished Goods (2) Work in Process- Fil ling Department 3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places. Increase or Decrease Amount 4 Change in direct materials cost per equivalent unit Change in conversion cost per equivalent unit dropdown 4. Discuss the uses of the cost of production report and the results of part (3) The cost of production report may be used as the basis for allocating product costs between and The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.

Answer 1

Cost of Production Report-Mixing Department
For the Month Ended March 31
UNITS	Whole Units	Equivalent Units
Units charged to production:
Inventory in process, Jan 1	5,300
Received from materials storeroom	68,400
Total units accounted for by the Mixing Department	73,700
Units to be assigned costs:
Inventory in process, JAn 1 (60% completed)	5,300	0	2120	(5300*40%)
Started and completed in March	62,500	62,500	62,500
Transferred to Finished goods Inventory	67,800	62500	64620
Inventory in process,Jan 31 10% completed)	5,900	5,900	590
Total units to be assigned costs	73,700	68,400	65,210
COSTS	Costs
	Direct Materials	Conversion	Total
Cost per equivalent unit:
Total costs for Jan in FillingDepartment	$677,160	$449,949	$1,127,109
Total equivalent units	68400	65210
Cost per equivalent unit	$9.90	$6.90	$16.80
Costs assigned to production:
Inventory in process, Jan 1			$74,730
Costs incurred in Jan			1,127,109
Total costs accounted for by the Mixing Department			$1,201,839
Cost allocated to completed and
partially completed units:
Inventory in process, JAn 1 balance			$74,730
To complete inventory in process, Jan 1 (2120*6.9)	$0.00	$14,628	14,628
Cost of completed Jan 1 work in process			$89,358
Started and completed in Jan	$618,750	$431,250	1,050,000
Transferred to FG Department in March	$618,750.00	$445,878.00	$1,139,358
Inventory in process, Jan 31	$58,410	$4,071	$62,481
Total costs assigned by the Filling Department	$677,160.00	$449,949.00	$1,201,839
ans 2	Dr	Cr
Work In process-Filling Department	$677,160
Work In process-Reaction Department		$677,160
Finished Goods	$1,139,358
Work In process-Filling Department		$1,139,358
ans 3
Change in direct material cost per equivalent	Decrease	0.3	(10.2-9.9)	or -.3
Change in conversion cost per equivalent unit	increase	0.4	(6.9-6.5)
ANS 4
Direct material and conversion cost

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