A company is trying to decide whether to sell partiallycompleted goods in their current state or incur additional costs tofinish the goods and sell them as compete units. Which is notrelevent?
A.selling price of completed units
b. the costs previously incurred to process the units to thispart.
c. selling price of partially completed units.
d the costs that will be incurred to finish units
A company is trying to decide whether to sell partiallycompleted goods in their current state or incur additional costs tofinish the goods and sell them as compete units. Which is notrelevent?
A.selling price of completed units
b. the costs previously incurred to process the units to thispart.
c. selling price of partially completed units.
d the costs that will be incurred to finish units
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Cost of Production Report
The debits to Work in ProcessâRoasting Department for MorningBrew Coffee Company for August, together with informationconcerning production, are as follows:
| Work in process, August 1, 500 pounds, 60%completed | $2,300* | |||
| *Direct materials (500 X $3.7) | $1,850 | |||
| Conversion (500 X 60% X $1.5) | 450 | |||
| $2,300 | ||||
| Coffee beans added during August, 16,000pounds | 58,400 | |||
| Conversion costs during August | 25,280 | |||
| Work in process, August 31, 800 pounds, 50%completed | ? | |||
| Goods finished during August, 15,700 pounds | ? | |||
All direct materials are placed in process at the beginning ofproduction.
a. Prepare a cost of production report,presenting the following computations:
Direct materials and conversion equivalent units of productionfor August.
Direct materials and conversion costs per equivalent unit forAugust.
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 equivalentunit, round your answer to two decimal places.
| Morning Brew Coffee Company | |||
| Costof Production Report-Roasting Department | |||
| Forthe Month Ended August 31 | |||
| UnitInformation | |||
| Units charged toproduction: | |||
| Inventory in process, August1 | |||
| Received from materialsstoreroom | |||
| Total units accounted for bythe Roasting Department | |||
| Units to be assignedcosts: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials (1) | Conversion (1) | |
| Inventory in process, August1 | |||
| Started and completed inAugust | |||
| Transferred to finished goodsin August | |||
| Inventory in process, August31 | |||
| Total units to be assignedcosts | |||
| CostInformation | |||
| Cost per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for August inRoasting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit(2) | $ | $ | |
| Costs assigned toproduction: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, August1 | $ | ||
| Costs incurred in August | |||
| Total costs accounted for bythe Roasting Department | $ | ||
| Costs allocated to completedand partially completed units: | |||
| Inventory in process, August 1balance | $ | ||
| To complete inventory inprocess, August 1 | $ | $ | |
| Cost of completed August 1 workin process | $ | ||
| Started and completed inAugust | |||
| Transferred to finished goodsin August (3) | $ | ||
| Inventory in process, August 31(4) | |||
| Total costs assigned by theRoasting Department | $ | ||
Feedback
a. How much more (percentage amount) needed to be done to thebeginning work in process units to make the units to complete totransfer to the next department? Did these units require morematerial cost or more conversion cost? How much, in terms of cost,had been done to these units in the prior period? In order forunits to be transferred to the next department, the units have tobe complete with respect to both materials and conversion. When arematerials added in the process? How complete are the units inending inventory with respect to materials? How compete are theunits in ending inventory with respect to conversion? Materials andconversion cost needs to be allocated among the equivalent units.Are the number of equivalent units the same for materials andconversion?
b. Compute and evaluate the change in cost perequivalent unit for direct materials and conversion from theprevious month (July). If required, round your answers to thenearest cent.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | Decrease | $ |
| Change in conversion cost per equivalent unit | Increase | $ |
