Cost of Production Report The Cutting Department of Karachi Carpet Company provi
ID: 2538494 • 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 cost 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, 11,000 units, 60% completed $141,020* *Direct materials (11,000 × $10) $110,000 Conversion (11,000 × 60% × $4.7) 31,020 $141,020 Materials added during January from Weaving Department, 169,600 units $1,704,480 Direct labor for January 364,176 Factory overhead for January 445,104 Goods finished during January (includes goods in process, January 1), 171,600 units — Work in process, January 31, 9,000 units, 40% 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 11000 Received from Weaving Department 169600 Total units accounted for by the Cutting Department 180600 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, January 1 11,000 0 4400 Started and completed in January 160,600 160,600 160,600 Transferred to finished goods in January 171,600 160,600 165,000 Inventory in process, January 31 9,000 9,000 3,600 Total units to be assigned cost 180,600 169,600 168,600 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for January in Cutting Department $1,704,480 $809,280 Total equivalent units 169,600 168,600 Cost per equivalent unit $10.05 $4.80 Costs assigned to production: Direct Materials Conversion Total Inventory in process, January 1 $141,020 Costs incurred in January 2,513,760 Total costs accounted for by the Cutting Department $2,654,780 Costs allocated to completed and partially completed units: Inventory in process, January 1 balance $141,020 To complete inventory in process, January 1 $0 $21,120.00 $21,120.00 Cost of completed January 1 work in process $162,140.00 Started and completed in January $1,614,030 $770,880 $2,384,910 Transferred to finished goods in January $2,547,050.00 Inventory in process, January 31 90,450 17,280 107,730 Total costs assigned by the Cutting Department $2,654,780.00 b Increase or Decrease Amount Change in direct materials cost per equivalent unit Increase 0.05 Change in conversion cost per equivalent unit Increase 0.1