Hana Coffee Company roasts and packs coffee beans. The process begins by placing

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: ACCOUNT Work in Process-Roasting Department ACCOUNT NO Balance Date Item Debit Credit Debit Credit July 1 Bal., 7,500 units, 1/5 completed 31 DIrect materlals, 337,500 unlts 31 Direct labor 31 Factory overheac 31 Goods ransferred, 338,000 units 31 Ba., 2 unlts, 3/5 completed 21,450 965,450 1,157,250 1,204,940 945,000 190,800 47,690 Required

Explanation / Answer

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 7500 Received from materials storeroom 337500 Total units accounted for by the Roasting Department 345000 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, July 1 7500 0 6000 Started and completed in July 330500 330500 330500 Transferred to Packing Department in July 338000 330500 336500 Inventory in process, July 31 7000 7000 4200 Total units to be assigned costs 345000 337500 340700 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for July in Roasting Department 945000 238490 Total equivalent units 337500 340700 Cost per equivalent unit 2.8 0.7 Costs charged to production: Direct Materials Conversion Total Inventory in process, July 1 21450 Costs incurred in July 1183490 Total costs accounted for by the Roasting Department 1204940 Cost allocated to completed and partially completed units: Inventory in process, July 1 balance 21450 To complete inventory in process, July 1 0 4200 4200 Cost of completed July 1 work in process 25650 Started and completed in July 925400 231350 1156750 Transferred to Packing Department in July 1182400 Inventory in process, July 31 19600 2940 22540 Total costs assigned by the Roasting Department 1204940 2 Increase or Decrease Amount Change in direct materials cost per equivalent unit Increase 0.1 Change in conversion cost per equivalent unit Decrease 0.1

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