Question

Arabica Highland 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., 5,000 units, 4/5 completed					14,300
	31	Direct materials, 200,000 units	480,000				494,300
	31	Direct labor	95,700				590,000
	31	Factory overhead	23,940				613,940
	31	Goods transferred, 201,000 units			?
	31	Bal., ? units, 3/5 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 two decimal places.

Arabica Highland 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			$

2. Assuming that the July 1 work in process inventory includes $11,500 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 the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit		$
Change in conversion cost per equivalent unit		$

Answer 1

Arabica Highland Coffee Company Cost of Production Report-Roasting Department For the Month Ended July 31 Units charged to production: Inventory in process, July 1 5,000 Received from materials storeroom 200.000 Total units accounted for by the Roasting Department 205,000 Whole Units Equivalent Units Direct Conversion Materials Costs Units account for: 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 5,000 196,000 201,000 4,000 205,000 196,000 196,000 4,000 200,000 1,000 196,000 197,000 2,400 199,400 Direct Materials Conversion Costs Total Cost per equivalent unit: Total costs for July in Roasting Department Divided by Total equivalent units Cost per equivalent unit $480,000 200,000 $2.40 $119,640 199,400 $0.60 Inventory in process, July 1 Costs incurred in July Total costs accounted for by the Roasting Department $14,300 $599,640 S613,940 $0 $600 Costs 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 Conpleted in July Transferred to Molding Department in July Inventory in process, July 31 Total costs assigned by the Roasting Department $470,400 $117,600 $14,300 $600 $14,900 $588,000 $602,900 $11,040 S613,940 $9,600 $1,440 Increase or Decrease Amount Increase $0.10 Decrease $0.10 Change in direct materials cost per equivalent unit Change in conversion cost per equivalent unit