Cost of Production Report The debits to Work in Process—Roasting Department for
ID: 2332527 • Letter: C
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:
All direct materials are placed in process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
Direct materials and conversion equivalent units of production for August.
Direct materials and conversion costs per equivalent unit for August.
Cost of goods finished during August.
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.
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.
Work in process, August 1, 1,200 pounds, 50% completed $5,460* *Direct materials (1,200 X $3.8) $4,560 Conversion (1,200 X 50% X $1.5) 900 $5,460 Coffee beans added during August, 38,000 pounds 142,500 Conversion costs during August 60,800 Work in process, August 31, 2,000 pounds, 70% completed ? Goods finished during August, 37,200 pounds ?Explanation / Answer
Answer: Morning Brew Coffee Company Cost of Production Report-Roasting Department For the Month Ended August 31 1 Unit Information Units to account for Beginning Inventory 1,200 Units started during Feburary 38,000 Total units to account for 39,200 Total units accounted for Units completed and transferred out 37,200 Ending Inventory 2,000 Total units accounted for 39,200 2 Equivalent units of production-Weighted average method (unit*% Material) (unit*% Labour) a Units % Material EUP-Material % Labour EUP-Labour Units completed and transferred out 37,200 100% 37,200 100% 37,200 Ending Inventory 2,000 100% 2,000 70% $ 1,400 Equivalent Units of conversion 39,200 38,600 Cost per Unit Material Labour Total Cost of beginning work in progress $ 4,560 $ 900 $ 5,460 Cost incurred during the year $ 1,42,500 $ 60,800 $ 2,03,300 i Total Cost Cost $ 1,47,060 Cost $ 61,700 Cost $ 2,08,760 ii Equivalent Units of production EUP 39,200 EUP 38,600 EUP i*ii Cost per Unit $ 3.75 1.60 b Cost of units finished and transferred out aa bb aa*bb EUP Cost per EUP Total Cost Cost transferred out Direct material 37,200 $ 3.75 $ 1,39,557 Labour Cost 37,200 $ 1.60 $ 59,462 Total transferred out $ 1,99,019 c Cost of ending work in progress Direct material 2,000 $ 3.75 $ 7,503 Labour Cost ($1.60*70%) 2,000 $ 1.12 $ 2,238 $ 9,741 Total Cost accounted for $ 2,08,760