Question

Cost of Production Report

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 600 pounds, 30% completed				$2,292*
	*Direct materials (600 X $3.4)	$2,040
	Conversion (600 X 30% X $1.4)	$252
		$2,292
Coffee beans added during August, 19,000 pounds				63,650
Conversion costs during August				28,080
Work in process, August 31, 1,000 pounds, 30% completed				?
Goods finished during August, 18,600 pounds				?

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

1. Direct materials and conversion equivalent units of production for August
2. Direct materials and conversion costs per equivalent unit for August
3. Cost of goods finished during August
4. Cost of work in process at August 31

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1
Received from materials storeroom
Total units accounted for by the Roasting Department
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1
Started and completed in August
Transferred to finished goods in August
Inventory in process, August 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Direct Materials	Conversion
Total costs for August in Roasting Department		$	$
Total equivalent units
Cost per equivalent unit (2)		$	$
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$
Costs incurred in August
Total costs accounted for by the Roasting Department			$
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$
To complete inventory in process, August 1	$	$
Cost of completed August 1 work in process			$
Started and completed in August
Transferred to finished goods in August (3)			$
Inventory in process, August 31 (4)
Total costs assigned by the Roasting Department			$

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (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

FIFO method
Beggining units	600	Transferred out	18,600
Started into production	19000	Ending units	1,000
	19600		19600
Equivalent units	Material	Conversion
Beginning units	600	600
Completion in current period	0%	70%
A	0	420
Units started and completed	18000	18000
Completion	100%	100%
B	18000	18000
Ending Units	1,000	1,000
Completion	100%	30%
C	1000	300
Total units A+B+C	19000	18720
Cost per equivalent units
Per unit cost	Cost	Total units	Per unit cost
Material cost	63650	19000	3.35
Conversion cost	28080	18720	1.50
Total	91730

Cost of goods sold	Material	convertion cost
Beginning work in progress A	2040	252	2292
Beginning inventory completed
Completion	0%	70%
Per unit cost	3.35	1.50
Units	600	600
Total cost   B	0	630	630
Units started and completed
Completion	100%	100%
Per unit cost	3.35	1.50
Units	18000	18000
Total cost    C	60300	27000	87300
Total cost A+B+C	62340	27630	90222
Ending work in progress
Completion	100%	30%
Per unit cost	3.35	1.50
Units	1,000	1,000
Total cost	3350	450	3800
	Total cost accounted for		94022

b)

Cost per equivalent unit	Material	Conversion cost
For current period	3.35	1.50
For beginning inventory	3.4	1.40
increase (decrease)	-0.05	0.10