Venus Chocolate Company processes chocolate into candy bars. The process begins

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:

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.

2. Assuming that the March 1 work in process inventory includes $9,350 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.

ACCOUNT Work in Process—Blending Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Mar. 1 Bal., 5,500 units, 3/5 completed 11,330 31 Direct materials, 220,000 units 396,000 407,330 31 Direct labor 88,200 495,530 31 Factory overhead 22,000 517,530 31 Goods transferred, 221,000 units ? 31 Bal., ? units, 3/5 completed ?

Explanation / Answer

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 5500 Received from materials storeroom 220000 Total units accounted for by the Blending Department 225500 Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, March 1 5500 0 2200 Started and completed in March 215500 215500 215500 Transferred to Molding Department in March 221000 215500 217700 Inventory in process, March 31 4500 4500 2700 Total units to be assigned costs 225500 220000 220400 Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for March in Blending Department 396000 110200 Total equivalent units 220000 220400 Cost per equivalent unit 1.8 0.5 Costs charged to production: Direct Materials Conversion Total Inventory in process, March 1 11330 Costs incurred in March 506200 Total costs accounted for by the Blending Department 517530 Cost allocated to completed and partially completed units: Inventory in process, March 1 balance 11330 To complete inventory in process, March 1 0 1100 1100 Cost of completed March 1 work in process 12430 Started and completed in March 387900 107750 495650 Transferred to Molding Department in March 508080 Inventory in process, March 31 8100 1350 9450 Total costs assigned by the Blending Department 517530 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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