Question

Transferred to finished goods in August Inventory in process, August 31 Total units to be assigned costs Cost Information Costs per equivalent unit: Total costs for August in Roasting Department Total equivalent units Cost per equivalent unit (2) Costs assigned to production: Direct Inventory in process, August 1 Costs incurred in August Total costs accounted for by the Roasting Department Costs allocated to completed and partially completed units: Inventory in process, August 1 balance To complete inventory in process, August 1 Cost of completed August 1 work in process Started and completed in August Transferred to finished goods in August (3) Inventory in process, August 31 (4) Total costs assigned by the Roasting Department 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. Increase or Decrease Amount Change in direct materials cost per equivalent unit Change in conversion cost per equivalent unit

Answer 1

Solution a:

	Morning Brew Coffee Company
	Cost of Production Report-Roasting Department
	For the Month Ended August 31
	Units Information
	Units charged to production:
	Inventory in process, August 1	500
	Received from Materials storeroom	16000
	Total units accounted for by the Roasting Department	16500
		Whole Units	Equivalent Units
			Direct Materials	Conversion
	Units to be assigned costs:
	Inventory in process, August 1 (40% completed)	500	0	200
	Started and completed in August (12700-400)	15200	15200	15200
	Transferred to Finished goods in August	15700	15200	15400
	Inventory in process, August 31 (60% completed)	800	800	480
	Total units to be assigned costs	16500	16000	15880
	COSTS Information
			Direct Materials	Conversion
	Cost per equivalent unit:
	Total costs for August in Roasting Department		$80,800	$33,348
	/Total equivalent units		16000	15880
	Cost per equivalent unit		$5.05	$2.10
		Direct Materials	Conversion	Total
	Costs assigned to production:
	Inventory in process, August 1			$3,150
	Costs incurred in August			$1,14,148
	Total costs accounted for by the Roasting Department			$1,17,298
	Costs allocated to completed and partially completed units:
	Inventory in process, August 1-balance			$3,150
	To complete inventory in process, August 1 (Equi. Units*cost per Equi. Unit)	$0	$420	$420
	Cost of completed August 1 work in process			$3,570
	Started and completed in August	$76,760	$31,920	$1,08,680
	Transferred to Finished Goods in August			$1,12,250
	Inventory in process, August 31	$4,040	$1,008	$5,048
	Total costs assigned by the Roasting Department			$1,17,298

Solution b:

	Increase/ Decrease	Amount
Change in Direct materials Cost per Equivalent Unit ($5.05 -$5.10)	Decrease	$0.05
Change in Conversion Cost per Equivalent Unit ($2.10 - $2.00)	Increase	$0.10