Venus Chocolate Company processes chocolate into candy bars. The process begins
ID: 2469641 • Letter: V
Question
Venus Chocolate Company processes chocolate into candy bars. The process begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Department. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the Molding Department, where the milk chocolate is formed into candy bars. The following is a partial work in process account of the Blending Department at March 31, 2016:
ACCOUNT Work in Process—Blending Department ACCOUNT NO.
Date Item Debit Credit Balance
Debit Credit
Mar. 1 Bal., 5,600 units, 2/5 completed 10,864
31 Direct materials, 224,000 units 403,200 414,064
31 Direct labor 89,800 503,864
31 Factory overhead 22,500 526,364
31 Goods transferred, 225,000 units ?
31 Bal., ? units, 2/5 completed ?
Required:
1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Blending Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.
Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31, 2016
Unit Information
Units charged to production:
Inventory in process, March 1
Received from materials storeroom
Total units accounted for by the Blending Department
Units to be assigned costs:
Equivalent Units
Whole Units Direct Materials Conversion
Inventory in process, March 1
Started and completed in March
Transferred to Molding Department in March
Inventory in process, March 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
Direct Materials Conversion
Total costs for March in Blending Department $
$
Total equivalent units
Cost per equivalent unit $
$
Costs charged to production:
Direct Materials Conversion Total
Inventory in process, March 1 $
Costs incurred in March
Total costs accounted for by the Blending Department $
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance $
To complete inventory in process, March 1 $
$
Cost of completed March 1 work in process $
Started and completed in March
Transferred to Molding Department in March $
Inventory in process, March 31
Total costs assigned by the Blending Department $
2. Assuming that the March 1 work in process inventory includes $9,520 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March. 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 $
Explanation / Answer
1
Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31, 2016
Unit Information
Units charged to production:
Inventory in process, March 1
5600
Received from materials storeroom
224000
Total units accounted for by the Blending Department
229600
Units to be assigned costs:
Equivalent Units
Whole Units
Direct Materials
Conversion
Inventory in process, March 1
5600
0
3360
(5600*3/5)
Started and completed in March
219400
219400
219400
(225000-5600)
Transferred to Molding Department in March
225000
219400
222760
Inventory in process, March 31
4600
4600
1840
(229600-225000)
(4600*2/5)
Total units to be assigned costs
229600
224000
224600
Cost Information
Costs per equivalent unit:
Direct Materials
Conversion
Total costs for March in Blending Department
$ 403,200
$ 112,300
(89800+22500)
Total equivalent units
224000
224600
Cost per equivalent unit
$ 1.80
$ 0.50
Costs charged to production:
Direct Materials
Conversion
Total
Inventory in process, March 1
$ 10,864
Costs incurred in March
$ 403,200
$ 112,300
$ 515,500
Total costs accounted for by the Blending Department
$ 403,200
$ 112,300
$ 526,364
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance
$ 10,864
To complete inventory in process, March 1
$ 1,680
$ 1,680
(3360*0.50)
Cost of completed March 1 work in process
0
$ 1,680
$ 12,544
Started and completed in March
$ 394,920
$ 109,700
$ 504,620
(219400*1.80)
(219400*0.50)
Transferred to Molding Department in March $
$ 394,920
$ 111,380
$ 517,164
Inventory in process, March 31
$ 8,280
$ 920
$ 9,200
(4600*1.80)
(1840*0.50)
Total costs assigned by the Blending Department $
$ 403,200
$ 112,300
$ 526,364
2
Calculation of increase or decrease in the cost per equivalent unit:
Change in direct materials cost per equivalent unit
Change in conversion cost per equivalent unit
For the Month of February:
Direct Materials
Conversion
Ending work in process inventory Cost
$ 9,520
$ 1,344
(10864-9520)
Ending work in process Equivalent Units
5600
2240
(5600*2/5)
Cost Per Equivalent Units in February
$ 1.70
$ 3.00
Cost Per Equivalent Unit in March
$ 1.80
$ 0.50
Change in direct materials cost per equivalent unit
$ 0.10
(1.80-1.70)
Change in conversion cost per equivalent unit
$ (2.50)
(0.50-3)
1
Venus Chocolate Company
Cost of Production Report-Blending Department
For the Month Ended March 31, 2016
Unit Information
Units charged to production:
Inventory in process, March 1
5600
Received from materials storeroom
224000
Total units accounted for by the Blending Department
229600
Units to be assigned costs:
Equivalent Units
Whole Units
Direct Materials
Conversion
Inventory in process, March 1
5600
0
3360
(5600*3/5)
Started and completed in March
219400
219400
219400
(225000-5600)
Transferred to Molding Department in March
225000
219400
222760
Inventory in process, March 31
4600
4600
1840
(229600-225000)
(4600*2/5)
Total units to be assigned costs
229600
224000
224600
Cost Information
Costs per equivalent unit:
Direct Materials
Conversion
Total costs for March in Blending Department
$ 403,200
$ 112,300
(89800+22500)
Total equivalent units
224000
224600
Cost per equivalent unit
$ 1.80
$ 0.50
Costs charged to production:
Direct Materials
Conversion
Total
Inventory in process, March 1
$ 10,864
Costs incurred in March
$ 403,200
$ 112,300
$ 515,500
Total costs accounted for by the Blending Department
$ 403,200
$ 112,300
$ 526,364
Cost allocated to completed and partially completed units:
Inventory in process, March 1 balance
$ 10,864
To complete inventory in process, March 1
$ 1,680
$ 1,680
(3360*0.50)
Cost of completed March 1 work in process
0
$ 1,680
$ 12,544
Started and completed in March
$ 394,920
$ 109,700
$ 504,620
(219400*1.80)
(219400*0.50)
Transferred to Molding Department in March $
$ 394,920
$ 111,380
$ 517,164
Inventory in process, March 31
$ 8,280
$ 920
$ 9,200
(4600*1.80)
(1840*0.50)
Total costs assigned by the Blending Department $
$ 403,200
$ 112,300
$ 526,364
2
Calculation of increase or decrease in the cost per equivalent unit:
Change in direct materials cost per equivalent unit
Change in conversion cost per equivalent unit
For the Month of February:
Direct Materials
Conversion
Ending work in process inventory Cost
$ 9,520
$ 1,344
(10864-9520)
Ending work in process Equivalent Units
5600
2240
(5600*2/5)
Cost Per Equivalent Units in February
$ 1.70
$ 3.00
Cost Per Equivalent Unit in March
$ 1.80
$ 0.50
Change in direct materials cost per equivalent unit
$ 0.10
(1.80-1.70)
Change in conversion cost per equivalent unit
$ (2.50)
(0.50-3)
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