Cost of Production Report The debits to Work in Process—Roasting Department for
ID: 2486612 • Letter: C
Question
Cost of Production Report
The debits to Work in Process—Roasting Department for St. Arbucks Coffee Company for July 2014, 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 July.
Direct materials and conversion costs per equivalent unit for July.
Cost of goods finished during July.
Cost of work in process at July 31, 2014.
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.
St. Arbucks Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended July 31, 2014
Inventory in process, July 1
Received from materials storeroom
Total units accounted for by the Roasting Department
Equivalent Units
Whole Units
Direct Materials (1)
Conversion (1)
Inventory in process, July 1
Started and completed in July
Transferred to finished goods in July
Inventory in process, July 31
Total units to be assigned costs
Direct Materials
Conversion
Total costs for July in Roasting Department
$
$
Total equivalent units
Cost per equivalent unit (2)
$
$
Direct Materials
Conversion
Total
Inventory in process, July 1
$
Costs incurred in July
Total costs accounted for by the Roasting Department
$
Cost allocated to completed and partially completed units:
Inventory in process, July 1 balance
$
To complete inventory in process, July 1
$
$
Cost of completed July 1 work in process
$
Started and completed in July
Transferred to finished goods in July (3)
$
Inventory in process, July 31 (4)
Total costs assigned by the Roasting Department
$
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a. How much more (percentage amount) needed to be done to the beginning work in process units to make the units to complete to transfer to the next department? Did these units require more material cost or more conversion cost? How much, in terms of cost, had been done to these units in the prior period? In order for units to be transferred to the next department, the units have to be complete with respect to both materials and conversion. When are materials added in the process? How complete are the units in ending inventory with respect to materials? How compete are the units in ending inventory with respect to conversion? Materials and conversion cost needs to be allocated among the equivalent units. Are the number of equivalent units the same for materials and conversion?
Learning Objective 2, Learning Objective 4.
b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (June). If required, round your answers to the nearest cent.
Work in process, July 1, 400 pounds, 50% completed $1,240* *Direct materials (400 X $2.60) $1,040 Conversion (400 X 50% X $1.00) $200 $1,240 Coffee beans added during July, 13,000 pounds 33,150 Conversion costs during July 14,135 Work in process, July 31, 700 pounds, 50% completed ? Goods finished during July, 12,700 pounds ?Explanation / Answer
I Physical Flow of Units II Schedule of Equivalent units To account for Materials Conversion Costs Opening WIP 400 Pounds Started during July 13000 Pounds 13400 pounds Accounted for Completed& transferred 12700 pounds 12700 12700 Ending WIP 700 pounds 700 350 50000 pounds 13400 13050 Cost per Equivalent Unit Total cost Direct Materials Conv.Cost Beginning WIP 1240 1040 200 Started into production 47285 33150 14135 Total cost 48525 34190 14335 Equivalent units as above 13400 13050 Cost per Equivalent unit 2.55 1.10 Total cost 3.65 III Cost Reconciliation & Cost per Equivalent Unit Total cost Direct Materials Conv. Cost Beginning WIP 1240 1040 200 Started into production 47285 33150 14135 Total cost 48525 34190 14335 Equivalent units as above 13400 13050 Cost per Equivalent unit 2.55 1.10 Cost Allocation Total Costs Materials Conv. Cost Completed &transferred 46355 32385 13970 Ending WIP 2170 1785 385 Total 48525 34170 14355 a.) 50% Conversion costs Reqd. for Op.WIP Prior period costs for Op. WIP---- Materials (100%) 1040+ Conv. Cost (50%) 200= 1240 In July ---- Conv. Cost (Bal.50%=200 Materials are added in the beginning of the process . Ending Inventory =--- Materials- 100% complete & Conversion Costs - 50% complete No. Materials 100% - so, 13400 units; Conv. Cost(50% complete-so, 13050 Dir.mat. Conv.cost Total cost June 1040/400 200/400 1240/400 2.6 0.5 3.1 July 2.5 1.1 3.6 Increase/(Decrease) -0.1 0.6 0.5