Cost of Production Report Hana Coffee Company roasts and packs coffee beans. The
ID: 2548174 • Letter: C
Question
Cost of Production Report
Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:
ACCOUNT Work in Process—Roasting Department
ACCOUNT NO.
Date
Item
Debit
Credit
Balance
Debit
Credit
July
1
Bal., 30,000 units, 10% completed
121,800
31
Direct materials, 155,000 units
620,000
741,800
31
Direct labor
90,000
831,800
31
Factory overhead
33,272
865,072
31
Goods transferred, 149,000 units
?
31
Bal., ? units, 45% completed
?
Required:
1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to the nearest cent.
Hana Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended July 31
Unit Information
Units charged to production:
Inventory in process, July 1
Received from materials storeroom
Total units accounted for by the Roasting Department
Units to be assigned costs:
Equivalent Units
Whole Units
Direct Materials
Conversion
Inventory in process, July 1
Started and completed in July
Transferred to Packing Department in July
Inventory in process, July 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
Direct Materials
Conversion
Total costs for July in Roasting Department
$
$
Total equivalent units
Cost per equivalent unit
$
$
Costs charged to production:
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 Packing Department in July
$
Inventory in process, July 31
Total costs assigned by the Roasting Department
$
1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.
2. Assuming that the July 1 work in process inventory includes $119,400 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between June and July. If required, round your answers to two decimal places.
Increase or Decrease
Amount
Change in direct materials cost per equivalent unit
Increase
$
Change in conversion cost per equivalent unit
Decrease
$
ACCOUNT Work in Process—Roasting Department
ACCOUNT NO.
Date
Item
Debit
Credit
Balance
Debit
Credit
July
1
Bal., 30,000 units, 10% completed
121,800
31
Direct materials, 155,000 units
620,000
741,800
31
Direct labor
90,000
831,800
31
Factory overhead
33,272
865,072
31
Goods transferred, 149,000 units
?
31
Bal., ? units, 45% completed
?
Explanation / Answer
Hana Coffee Company Cost of Production Report-Roasting Department For the Month Ended July 31 Unit Information Units charged to production: Inventory in process, July 1 30000 Received from materials storeroom 155000 Total units accounted for by the Roasting Department 185000 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, July 1 30000 0 27000 Started and completed in July 119000 119000 119000 Transferred to Packing Department in July 149000 119000 146000 Inventory in process, July 31 36000 36000 16200 Total units to be assigned costs 185000 155000 162200 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for July in Roasting Department 620000 123272 Total equivalent units 155000 162200 Cost per equivalent unit 4 0.76 Costs charged to production: Direct Materials Conversion Total Inventory in process, July 1 121800 Costs incurred in July 743272 Total costs accounted for by the Roasting Department 865072 Cost allocated to completed and partially completed units: Inventory in process, July 1 balance 121800 To complete inventory in process, July 1 0 20520 20520 Cost of completed July 1 work in process 142320 Started and completed in July 476000 90440 566440 Transferred to Packing Department in July 708760 Inventory in process, July 31 144000 12312 156312 Total costs assigned by the Roasting Department 865072 2 Increase or Decrease Amount Change in direct materials cost per equivalent unit Increase 0.02 Change in conversion cost per equivalent unit Decrease 0.04