Cost of Production Report Hana Coffee Company roasts and packs coffee beans. The
ID: 2338276 • Letter: C
Question
Cost of Production Report 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 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. Balance Date Item Debit Credit Debit Credit 7,446 328,746 383,646 397,410 uly 1 Bal., 5,100 units, 2/5 completed 31 Direct materials, 229,500 units 31 Direct labor 31 Factory overhead 31 Goods transferred, 230,000 units 31 Bal., 2 units, 1/5 completed 321,300 54,900 13,764 Required: 1. Prepare a cost of production report, and identify the missing amounts for Work in Process-Roasting Department. I an amount is zero, enter "o". When computing cost per equivalent units, round to two decimal 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 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Equivalent Units Direct Whole UnitsExplanation / Answer
Step for solution
Step 1
Equivalent Units of production = Physical units multiplied by % of completion
Step 2
Calculate total cost to be accounted for
Step 3
Cost per Equivalent Unit =Cost incurred during Month / Equivalent Units of production
Step 4
Cost assigned to units transferred out = Cost in beginning WIP + Cost incurred for complete beginning WIP + Cost of units in Started and completed
Step 5
Cost assigned to units ending work in progress = equivalent units in ending WIP inventory * Cost per Equivalent Unit
For direct material 100% unit completed it means remaining 0% completed in this month.
For conversion cost 2/5 = 40% unit completed it means (100-40) remaining 60% completed in this month.
Hone Coffee Company
Roasting Department production Report
First in First out (FIFO) Method
Month ended July, 31
Summary of Physical units
Units in beginning WIP inventory
5100
Units started during month
229500
Total unit to be accounted for
234600
Units completed and transferred out
230000
Units in ending WIP inventory (234600-230000)
4600
Total unit accounted for
234600
Material added at intial stage of production and conversion cost incurred throuout the period.
Equivalent Units of production
Particulars
Physical units
Direct material
Conversion Cost
%
units
%
units
units in beginning WIP inventory
5100
0%
0
60%
3060
Units in Started and completed (230000-5100)
224900
100%
224900
100%
224900
units in ending WIP inventory
4600
100%
4600
20%
920
Equivalent Units of production
229500
228880
Summary of cost to be accounted
Direct material
Conversion Cost
Total
Cost in beginning WIP
7446
Cost incurred during Month (Add) (Conversion Cost =54900+13764)
321300
68664
389964
total cost to be accounted for
321300
68664
397410
cost per Equivalent Unit
Cost incurred during Month
321300
68664
Equivalent Units of production
229500
228880
Cost per Equivalent Unit
1.40
0.30
1.70
Assign costs to units transferred out and units in ending WIP inventory
cost assigned to units transferred out
Cost in beginning WIP
7446
Cost incurred for complete beginning WIP
Direct material (0*1.4)
0
Conversion Cost (3060*0.3)
918
Cost incurred for complete beginning WIP
918
Cost of completed beginning WIP
8364
Cost of units in Started and completed
Direct material (224900*1.40)
314860
Conversion Cost (224900*0.30)
67470
Cost of units in Started and completed (224900*1.7)
382330
cost assigned to units transferred out
390694
cost assigned to units ending work in progress
Direct material (4600*1.4)
6440
Conversion Cost (920*0.3)
276
cost assigned to units ending work in progress
6716
Total cost assigned
397410
Conversion cost (7446-6630)
816
Direct material
Conversion cost
unit in beginning WIP
5100
5100
% of completed in beginning
100%
40%
equivalent unit
5100
2040
cost of beginning work in progress
6630
816
equivalent unit
5100
2040
cost per units for June (cost of beginning work in progress / equivalent unit )
1.30
0.40
Cost per Equivalent Unit in July
1.40
0.30
cost per units for June
-1.30
-0.40
increase (decrease) per unit
0.10
-0.10
remarks
Increase
decrease
Step for solution
Step 1
Equivalent Units of production = Physical units multiplied by % of completion
Step 2
Calculate total cost to be accounted for
Step 3
Cost per Equivalent Unit =Cost incurred during Month / Equivalent Units of production
Step 4
Cost assigned to units transferred out = Cost in beginning WIP + Cost incurred for complete beginning WIP + Cost of units in Started and completed
Step 5
Cost assigned to units ending work in progress = equivalent units in ending WIP inventory * Cost per Equivalent Unit
For direct material 100% unit completed it means remaining 0% completed in this month.
For conversion cost 2/5 = 40% unit completed it means (100-40) remaining 60% completed in this month.