Cost of Production Report Dover Chemical Company manufactures specialty chemical
ID: 2421273 • Letter: C
Question
Cost of Production Report
Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.
The balance in the account Work in Process— Filling was as follows on January 1, 2014:
Work in Process— Filling Department ( 3,400 units, 60% completed):
Direct materials ( 3,400 × $ 9.58) = $ 32,572
Conversion ( 3,400 × 60% × $ 3.90) = 7,956
Total $ 40,528
The following costs were charged to Work in Process— Filling during January.
Direct materials transferred from Reaction Department: 52,300 units at $ 9.50 a unit = $ 496,850
Direct labor = 101,560
Factory overhead = 95,166
During January, 53,000 units of specialty chemicals were completed. Work in Process— Filling Department on January 31 was 2,700 units, 30% completed.
Instructions
Use the attached excel file to:
1. Prepare a cost of production report for the Filling Department for January.
2. Journalize the entries for costs transferred from Reaction to Filling and the costs transferred from Filling to Finished Goods.
3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs.
4. Discuss the uses of the cost of production report and the results of part (3).
Module case study-b (1) [Compatibility Mode]-Excel HOMEINSERT PAGE LAYOUT FORMULAS DATA REVIEW VEW ADD-INSckBooks Sign in A Cut AutoSum A Wrap Text Copy Fill Sort & Find & Filter Select Paste B 1 u . A- $, % , 10848 Conditional Format as Ce Insert Delete Format Formatting. Table" Styles Merge & Center- Format Painter Clear Clipboard Font Alignment Number Styles Cells Editing L21 A B F G J K 14 1 15 16 DOVER CHEMICAL COMPANY Cost of Production Report Filling Department For the Month Ended January 31, 2014 UNITS Equivalent Units 20 Whole Units Direct Materials Conversion Units charged to production Inventory in process, January1 Received from Reaction Department Total units accounted for by the Filling Department 24 25 26 27 28 29 30 Units to be assigned cost complete) Inventory in process, January 1 Started and completed in January Transferred to finished goods in Janu Inventory in process, January 31 ( Total units to be assigned cost complete) 32 COSTS Costs Conversion 35 Direct Materials Total Costs per equivalent unit Total costs for January in Filling Department Total equivalent units Pr. 18(3)-3B READY + 100% 3:09 PM 2/9/2016Explanation / Answer
Cost of Prduction report
Cost of Prduction report Equivalent Units Dover chemical Company Cost of production Report-Cutting Department for 31January, 2014 Unit Information Units charged to production: Inventory in process, December 1 3400 Received from Weaving Department 52300 Total units accounted for by the Cutting Department 55700 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Conversion units completed Inventory in process, December 1 3400 3400 2040 1360 Started and completed in December 49600 49600 49600 Transferred to finished goods in December E 53000 53000 53000 Inventory in process, December 31 d 2700 2700 810 Total units to be assigned cost a 55700 52300 51770 (49600+2700) Cost Information Costs per equivalent unit: b/a c 13.3 9.5 3.8 Direct Materials Conversion Total costs for December in Cutting Department 496850 196726 Total equivalent units 52300 51770 Cost per equivalent unit 9.5 3.8 Costs assigned to production: Direct Materials Conversion Total Inventory in process, December 1 32572 7956 40528 Costs incurred in December 496850 196726 693576 Total costs accounted for by the Cutting Department b 529422 204682 734104 Costs allocated to completed and partially completed units: Inventory in process, December 1 balance at equivalent unit price 32572 7956 40528 To complete inventory in process, December 1 40% left for conversion completion so cost*1360 units 5168 5168 Cost of completed December 1 work in process 32572 13124 45696 Started and completed in December 471200 188480 659680 Transferred to finished goods in December 503772 201604 705376 Inventory in process, December 31 25650 3078 28728 Total costs assigned by the Cutting Department 529422 204682 734104 0 Increase or Decrease Amount Change in direct materials cost per equivalent unit .08 Decrease $9.58 Change in conversion cost per equivalent unit .5Decrease $4.30 Dr Cr Work in process- Filing Department 693576 Direct material-Reaction Department 496850 Direct Labour-Reaction Department 101560 Overhesd-Reaction Department 95166 Finished Goods 705376 Work in process- Filing Department 705376 D) Cost of production report tells what cost should be assigned to the goods finished and closing inventory and dividing the price based on equivalent units and cost so that the correct cost is allocated. It also tells that what incraese or decrease in cost of material and conversion cost as compare to previous Working