Cost of Production Report The Cutting Department of Karachi Carpet Company provi
ID: 2391891 • Letter: C
Question
Cost of Production Report
The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.
a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unitcomputations, round your answers to two decimal places.
b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places.
Work in process, January 1, 1,400 units, 75% completed $ 22,960* *Direct materials (1,400 X $12.65) $17,710 Conversion (1,400 X 75% X $5.00) 5,250 $22,960 Materials added during January from Weaving Department, 58,000 units $742,400 Direct labor for January 134,550 Factory overhead for January 151,611 Goods finished during January (includes goods in process, January 1), 56,200 units — Work in process, January 31, 3,200 units, 30% completed —Explanation / Answer
Karachi Carpet Company Cost of Production Report—Cutting Department For the Month Ended January 31 Unit Information Units charged to production: Inventory in process, January 1 1400 Received from Weaving Department 58000 Total units accounted for by the Cutting Department 59400 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, January 1 1400 0 350 Started and completed in January 54800 54800 54800 Transferred to Packing Department in January 56200 54800 55150 Inventory in process, January 31 3200 3200 960 Total units to be assigned costs 59400 58000 56110 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for January in Cutting Department 742400 286161 Total equivalent units 58000 56110 Cost per equivalent unit 12.80 5.10 Costs charged to production: Direct Materials Conversion Total Inventory in process, January 1 22960 Costs incurred in January 1028561 Total costs accounted for by the Cutting Department 1051521 Cost allocated to completed and partially completed units: Inventory in process, January 1 balance 22960 To complete inventory in process, January 1 0 1785 1785 Cost of completed January 1 work in process 24745 Started and completed in January 701440 279480 980920 Transferred to Packing Department in January 1005665 Inventory in process, January 31 40960 4896 45856 Total costs assigned by the Cutting Department 1051521 2 Increase or Decrease Amount Change in direct materials cost per equivalent unit Increase 0.15 Change in conversion cost per equivalent unit Increase 0.1