Lui 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 March 31: ACCOUNT Work in Process—Roasting Department ACCOUNT NO. Date Item Debit Credit Balance Debit Balance Credit March 1 Bal., 25,000 units, 10% completed 21,250 31 Direct materials, 600,000 units 450,000 471,250 31 Direct labor 244,600 715,850 31 Factory overhead 415,820 1,131,670 31 Goods transferred, 605,000 units ? 31 Bal., ? units, 45% completed ? 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 the nearest cent. Units Whole Units Equivalent Units Direct Materials Equivalent Units Conversion Units charged to production: Inventory in process, March 1 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Inventory in process, March 1 Started and completed in March Transferred to Packing Department in March Inventory in process, March 31 Total units to be assigned costs Costs Direct Materials Conversion Total Cost per equivalent unit: Total costs for March in Roasting Department Total equivalent units Cost per equivalent unit Costs assigned to production: Inventory in process, March 1 Costs incurred in March
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.
Lui 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 March 31:
ACCOUNT Work in Process—Roasting Department ACCOUNT NO.
| Date | Item | Debit | Credit | Balance Debit |
Balance Credit |
|---|---|---|---|---|---|
| March 1 | Bal., 25,000 units, 10% completed | 21,250 | |||
| 31 | Direct materials, 600,000 units | 450,000 | 471,250 | ||
| 31 | Direct labor | 244,600 | 715,850 | ||
| 31 | Factory |
415,820 | 1,131,670 | ||
| 31 | Goods transferred, 605,000 units | ? | |||
| 31 | Bal., ? units, 45% completed | ? |
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 the nearest cent.
| Units | Whole Units | Equivalent Units Direct Materials |
Equivalent Units Conversion |
|---|---|---|---|
| Units charged to production: | |||
| Inventory in process, March 1 | |||
| Received from materials storeroom | |||
| Total units accounted for by the Roasting Department | |||
| Units to be assigned costs: | |||
| Inventory in process, March 1 | |||
| Started and completed in March | |||
| Transferred to Packing Department in March | |||
| Inventory in process, March 31 | |||
| Total units to be assigned costs |
| Costs | Direct Materials | Conversion | Total |
|---|---|---|---|
| Cost per equivalent unit: | |||
| Total costs for March in Roasting Department | |||
| Total equivalent units | |||
| Cost per equivalent unit | |||
| Costs assigned to production: | |||
| Inventory in process, March 1 | |||
| Costs incurred in March | |||
| Total costs accounted for by the Roasting Department | |||
| Costs 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 finished goods in March | |||
| Inventory in process, March 31 | |||
| Total costs assigned by the Roasting Department |
2. Assuming that the March 1 work in process inventory includes $18,500 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 two decimal places.
| Line Item Description | Increase or Decrease | Amount |
|---|---|---|
| Change in direct materials cost per equivalent unit |
|
|
| Change in conversion cost per equivalent unit |
|
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
