PR 20-2A Robusta Coffe Company roasts and packs coffee beans. The process begins

Question

PR 20-2A Robusta Coffe 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 March 31, 2012; Account Work in process- Roasting Department Account No Date Item Debit Credit Balance Debit Credit Mar. 1 Bal., 1050 units, 30% completed 4997 31 Direct materials, 16,200 units 72,900 77,897 31 Direct labor 10,800 88,697 31 Factory Overhead 8,910 97,607 31 Goods transferred, 16,400 units ? 31 Bal., ___, 40% completed ? Instructions: 1. Prepare a cost of production report, and identify the missing amounts for Work in Process- Roasting Department 2. Assuming that the March 1 work in process inventory included $4,578 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March.

Explanation / Answer

Units Whole Units Direct Materials Conversion Units charged to production: Inventory in process 1050 Received from materials storeroom 16200 Total units accounted for 17250 Units to be assigned cost: Inventory in process March 1 30%completed(given) 1050 0 735 Started and completed in March (16400-1050) 15350 15350 15350 Goods transferred (given) 16400 15350 16085 Inventory in process, March 31(40% completed) 850 850 340 Total units to be assigned cost 17250 16200 16425 Costs Costs Direct Materials Conversion Total Unit costs: Total costs for January in Blending 72900 19710     Department Total equivalent units ÷ 16200 ÷ 16425 Cost per equivalent unit 4.5 1.2 Costs charged to production: Inventory in process, March 1 4997 Costs incurred in March 92610 Total costs accounted for 97607 Costs allocated to completed and partially completed units: Inventory in process, March 1 balance 4997 To complete inventory in process, (735*1.2) 882 882 Cost of completed March1 work in process 5879 Started and completed in March :15350*4.5; 15350*1.2 69075 18420 87495 Transferred (5879+87495) 93374 Inventory in process, March 31 (850*4.5), (340*1.2) 3825 408 4233 Total cost assigned by department (93374+4233) 97607 Costs transferred to Molding Department: 93374 Work in process, March 31: 850 units at a cost of 4233

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