Cost of Production Report Hana Coffee Company roasts and packs coffee beans. The
ID: 2340255 • 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:
Required:
1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.
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1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.
2. Assuming that the July 1 work in process inventory includes $22,120 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.
ACCOUNT Work in Process—Roasting Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit July 1 Bal., 7,900 units, 3/5 completed 25,912 31 Direct materials, 355,500 units 1,030,950 1,056,862 31 Direct labor 197,500 1,254,362 31 Factory overhead 49,418 1,303,780 31 Goods transferred, 356,000 units ? 31 Bal., ? units, 1/5 completed ? Cost of 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 NO. Credit 31 Direct materials, 355,500 units 31 Direct labor 31 Factory overhead 31 Goods transferred, 356,000 units 25,912 1,056,862 ,254,362 1,303,780 1,030,950 197,500 1 Bal., 2 units, 1/5 completed 1. Prepare a cost of production report, and identity the missing amounts for Work in Process-Roasting Department. If an amount is zero, enter "0". When computing cost per equtvalent units, round to two decimal places Hana Coffee Company Cost of Unilts charged to production Inventory in process, July Received from 363400Explanation / Answer
Solution 1:
Solution 2:
Cost per equivalent unit of material in june = $22,120 / 7900 = $2.80
Cost per equivalent unit of conversion in june = ($25,912 - $22,120) / (7900*3/5) = $0.80
Change in direct materials cost per equivalent unit from june to july = $2.90 - $2.80 = $0.10 increase
Change in conversion cost per equivalent unit from june to july = $0.70 - $0.80 = $0.10 decrease
Hana Coffee Roasting Department Computation of Equivalent unit (FIFO) Particulars Physical units Material Conversion Units to be accounted for: Beginning WIP Inventory 7900 Units started this period 355500 Total unit to be accounted for 363400 Units Accounted for: Units completed and transferred out From beginning inventoryMaterial - 0%
Conversion - 2/5 7900 0 3160 Started and completed currently 348100 348100 348100 Units in ending WIP
Material - 100%
Conversion - 1/5 7400 7400 1480 Total units accounted for 363400 355500 352740