The debits to Work in Process—Roasting Department for Morning Brew Coffee Compan

Question

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, 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 August.

Direct materials and conversion costs per equivalent unit for August.

Cost of goods finished during August.

Cost of work in process at August 31.

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.

Work in process, August 1, 600 pounds, 20% completed $3,372* *Direct materials (600 X $5.2) $3,120 Conversion (600 X 20% X $2.1) $252 $3,372 Coffee beans added during August, 19,000 pounds 97,850 Conversion costs during August 41,316 Work in process, August 31, 1,000 pounds, 30% completed ? Goods finished during August, 18,600 pounds ?

Explanation / Answer

Morning Brew Coffee Company Cost of Production Report-Roasting Department For the Month Ended August 31 Unit Information Units charged to production: Inventory in process, August 1 600 Received from materials storeroom 19000 Total units accounted for by the Roasting Department 19600 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, August 1 600 0 480 Started and completed in August 18000 18000 18000 Transferred to Packing Department in August 18600 18000 18480 Inventory in process, August 31 1000 1000 300 Total units to be assigned costs 19600 19000 18780 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for August in Roasting Department 97850 41316 Total equivalent units 19000 18780 Cost per equivalent unit 5.15 2.2 Costs charged to production: Direct Materials Conversion Total Inventory in process, August 1 3372 Costs incurred in August 139166 Total costs accounted for by the Roasting Department 142538 Cost allocated to completed and partially completed units: Inventory in process, August 1 balance 3372 To complete inventory in process, August 1 0 1056 1056 Cost of completed August 1 work in process 4428 Started and completed in August 92700 39600 132300 Transferred to Packing Department in August 136728 Inventory in process, August 31 5150 660 5810 Total costs assigned by the Roasting Department 142538 2 Increase or Decrease Amount Change in direct materials cost per equivalent unit Decrease 0.05 Change in conversion cost per equivalent unit Increase 0.1

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