Cost of Production Report The Cutting Department of Karachi Carpet Company provi
ID: 2545701 • 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 unit computations, round your answers to two decimal places.
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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?
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.
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Work in process, January 1, 14,200 units, 60% completed $175,228* *Direct materials (14,200 × $9.4) $133,480 Conversion (14,200 × 60% × $4.9) 41,748 $175,228 Materials added during January from Weaving Department, 218,800 units $2,078,600 Direct labor for January 488,115 Factory overhead for January 596,585 Goods finished during January (includes goods in process, January 1), 221,400 units — Work in process, January 31, 11,600 units, 35% completed —Explanation / Answer
Cost of Production Report-Cutting Department For the Month Ended January 31 Unit Information Units charged to production: Inventory in process, January 1 14200 Received from Weaving Department 218800 Total units accounted for by the Cutting Department 233000 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, January 1 14200 0 5680 Started and completed in January 207200 207200 207200 Transferred to Packing Department in January 221400 207200 212880 Inventory in process, January 31 11600 11600 4060 Total units to be assigned costs 233000 218800 216940 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for January in Cutting Department 2078600 1084700 Total equivalent units 218800 216940 Cost per equivalent unit 9.5 5 Costs charged to production: Direct Materials Conversion Total Inventory in process, January 1 175228 Costs incurred in January 3163300 Total costs accounted for by the Cutting Department 3338528 Cost allocated to completed and partially completed units: Inventory in process, January 1 balance 175228 To complete inventory in process, January 1 0 28400 28400 Cost of completed January 1 work in process 203628 Started and completed in January 1968400 1036000 3004400 Transferred to finished goods in January 3208028 Inventory in process, January 31 110200 20300 130500 Total costs assigned by the Cutting Department 3338528 2 Increase or Decrease Amount Change in direct materials cost per equivalent unit Increase 0.1 Change in conversion cost per equivalent unit Increase 0.1