Hana Coffee Company roasts and packs coffee beans. The process begins by placing
ID: 2534991 • Letter: H
Question
Hana 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:
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.
2. Assuming that the July 1 work in process inventory includes $5,640 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.
ACCOUNT Work in Process—Roasting Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit July 1 Bal., 4,700 units, 1/5 completed 6,016 31 Direct materials, 211,500 units 274,950 280,966 31 Direct labor 51,300 332,266 31 Factory overhead 12,774 345,040 31 Goods transferred, 212,000 units ? 31 Bal., ? units, 3/5 completed ?Explanation / Answer
Answer 1 Hana 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 4700 Received from materials storeroom 211500 Total units accounted for by the Roasting Department 216200 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, July 1 4700 0 3760 Started and completed in July 207300 207300 207300 Transferred to Packing Department in July 212000 207300 211060 Inventory in process, July 31 4200 4200 2520 Total units to be assigned costs 216200 211500 213580 Cost Information Cost per equivalent unit: Direct Materials Conversion Total costs for July in Roasting Department $274,950.00 $64,074.00 Total equivalent units 211500 213580 Cost per equivalent unit $1.30 $0.30 Costs assigned to production: Direct Materials Conversion Total Inventory in process, July 1 $5,640.00 $376.00 $6,016.00 Costs incurred in July $274,950.00 $64,074.00 $339,024.00 Total costs accounted for by the Roasting Department $280,590.00 $64,450.00 $345,040.00 Costs allocated to completed and partially completed units: Inventory in process, July 1 balance $5,640.00 $376.00 $6,016.00 To complete inventory in process, July 1 0 $1,128.00 $1,128.00 Cost of completed July 1 work in process $7,144.00 Started and completed in July $269,490.00 $62,190.00 $331,680.00 Transferred to Molding Department in July $338,824.00 Inventory in process, July 31 $5,460.00 $756.00 $6,216.00 Total costs assigned by the Roasting Department $345,040.00 Answer 2 Cost per Equivalent unit Change Amount Jul-01 Jul-31 Direct Material $1.20 $1.30 Increase $0.10 Conversion $0.40 $0.30 Decrease -$0.10
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