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. Morning Brew Coffee Company Cost of Production Report-Roasting Department For the Month Ended Aug
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Cost of Production Report
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
| Work in process, August 1, 800 pounds, 30% completed | $3,400* | |||
| *Direct materials (800 X $3.80) | $3,040 | |||
| Conversion (800 X 30% X $1.50) | 360 | |||
| $3,400 | ||||
| Coffee beans added during August, 25,000 pounds | 93,750 | |||
| Conversion costs during August | 39,440 | |||
| Work in process, August 31, 1,300 pounds, 30% completed | ? | |||
| Goods finished during August, 24,500 pounds | ? |
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.
| 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 | fill in the blank fbdb2001bf9bfe5_1 | ||
| Received from materials storeroom | fill in the blank fbdb2001bf9bfe5_2 | ||
| Total units accounted for by the Roasting Department | fill in the blank fbdb2001bf9bfe5_3 | ||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials (1) | Conversion (1) | |
| Inventory in process, August 1 | fill in the blank fbdb2001bf9bfe5_4 | fill in the blank fbdb2001bf9bfe5_5 | fill in the blank fbdb2001bf9bfe5_6 |
| Started and completed in August | fill in the blank fbdb2001bf9bfe5_7 | fill in the blank fbdb2001bf9bfe5_8 | fill in the blank fbdb2001bf9bfe5_9 |
| Transferred to finished goods in August | fill in the blank fbdb2001bf9bfe5_10 | fill in the blank fbdb2001bf9bfe5_11 | fill in the blank fbdb2001bf9bfe5_12 |
| Inventory in process, August 31 | fill in the blank fbdb2001bf9bfe5_13 | fill in the blank fbdb2001bf9bfe5_14 | fill in the blank fbdb2001bf9bfe5_15 |
| Total units to be assigned costs | fill in the blank fbdb2001bf9bfe5_16 | fill in the blank fbdb2001bf9bfe5_17 | fill in the blank fbdb2001bf9bfe5_18 |
| Cost Information | |||
| Cost per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for August in Roasting Department | $fill in the blank fbdb2001bf9bfe5_19 | $fill in the blank fbdb2001bf9bfe5_20 | |
| Total equivalent units | fill in the blank fbdb2001bf9bfe5_21 | fill in the blank fbdb2001bf9bfe5_22 | |
| Cost per equivalent unit (2) | $fill in the blank fbdb2001bf9bfe5_23 | $fill in the blank fbdb2001bf9bfe5_24 | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, August 1 | $fill in the blank fbdb2001bf9bfe5_25 | ||
| Costs incurred in August | fill in the blank fbdb2001bf9bfe5_26 | ||
| Total costs accounted for by the Roasting Department | $fill in the blank fbdb2001bf9bfe5_27 | ||
| Costs allocated to completed and partially completed units: | |||
| Inventory in process, August 1 balance | $fill in the blank fbdb2001bf9bfe5_28 | ||
| To complete inventory in process, August 1 | $fill in the blank fbdb2001bf9bfe5_29 | $fill in the blank fbdb2001bf9bfe5_30 | fill in the blank fbdb2001bf9bfe5_31 |
| Cost of completed August 1 work in process | $fill in the blank fbdb2001bf9bfe5_32 | ||
| Started and completed in August | fill in the blank fbdb2001bf9bfe5_33 | fill in the blank fbdb2001bf9bfe5_34 | fill in the blank fbdb2001bf9bfe5_35 |
| Transferred to finished goods in August (3) | $fill in the blank fbdb2001bf9bfe5_36 | ||
| Inventory in process, August 31 (4) | fill in the blank fbdb2001bf9bfe5_37 | fill in the blank fbdb2001bf9bfe5_38 | fill in the blank fbdb2001bf9bfe5_39 |
| Total costs assigned by the Roasting Department | $fill in the blank fbdb2001bf9bfe5_40 | ||
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 | $fill in the blank 19365701100802f_2 | |
| Change in conversion cost per equivalent unit | $fill in the blank 19365701100802f_4 |
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