The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows: Work in process, August 1, 800 pounds, 10% completed $3,868* *Direct materials (800 × $4.70) $3,760 Conversion (800 × 10% × $1.35) 108 $3,868 Coffee beans added during August, 16,343 pounds 73,544 Conversion costs during August 25,209 Work in process, August 31, 443 pounds, 42% completed ? Goods finished during August, 16,700 pounds ? All direct materials are placed in process at the beginning of production. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Prepare a cost of production report, presenting the following computations: Direct materials and conversion equivalent units of production for August Direct materials and conversion costs per equivalent unit for August Cost of goods finished during August Cost of work in process at August 31 If an amount is zero, enter "0". Round the answers in units to the nearest whole number, the answer for the cost per equivalent unit to the nearest cent, and the other monetary answers to the nearest whole dollar. Morning Brew Coffee Company Cost of Production Report-Roasting Department For the Month Ended August 31 UNITS Equivalent Units Whole Units Direct Materials (1) Conversion (1) Units charged to production: Inventory in process, August 1 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Inventory in process, August 1 _____ Started and completed in August Transferred to finished goods in August Inventory in process, August 31 Total units to be assigned costs COSTS Costs Direct Materials Conversion Total Costs per equivalent unit: Total costs for August in Roasting Department $ $ ____ Total equivalent units Cost per equivalent unit (2) $ $ Costs assigned to production: Inventory in process, August 1 $ Costs incurred in August Total costs accounted for by the Roasting Department $ Costs allocated to completed and partially completed units: Inventory in process, August 1–balance $ To complete inventory in process, August 1 $ $ Cost of completed August 1 work in process $ Started and completed in August Transferred to finished goods in August (3) $ Inventory in process, August 31 (4) Total costs assigned by the Roasting Department $ Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). 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 $
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.
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
| Work in process, August 1, 800 pounds, 10% completed | $3,868* | |||
| *Direct materials (800 × $4.70) | $3,760 | |||
| Conversion (800 × 10% × $1.35) | 108 | |||
| $3,868 | ||||
| Coffee beans added during August, 16,343 pounds | 73,544 | |||
| Conversion costs during August | 25,209 | |||
| Work in process, August 31, 443 pounds, 42% completed | ? | |||
| Goods finished during August, 16,700 pounds | ? |
All direct materials are placed in process at the beginning of production.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
-
Prepare a cost of production report, presenting the following computations:
- Direct materials and conversion equivalent units of production for August
- Direct materials and conversion costs per equivalent unit for August
- Cost of goods finished during August
- Cost of work in process at August 31
If an amount is zero, enter "0". Round the answers in units to the nearest whole number, the answer for the cost per equivalent unit to the nearest cent, and the other monetary answers to the nearest whole dollar.
Morning Brew Coffee Company Cost of Production Report-Roasting Department For the Month Ended August 31 UNITS Equivalent Units Whole
UnitsDirect
Materials
(1)Conversion
(1)Units charged to production: Inventory in process, August 1 Received from materials storeroom Total units accounted for by the Roasting Department Units to be assigned costs: Inventory in process, August 1 _____ Started and completed in August Transferred to finished goods in August Inventory in process, August 31 Total units to be assigned costs COSTS Costs Direct
MaterialsConversion Total Costs per equivalent unit: Total costs for August in Roasting Department $ $ ____ Total equivalent units Cost per equivalent unit (2) $ $ Costs assigned to production: Inventory in process, August 1 $ Costs incurred in August Total costs accounted for by the Roasting Department $ Costs allocated to completed and partially completed units: Inventory in process, August 1–balance $ To complete inventory in process, August 1 $ $ Cost of completed August 1 work in process $ Started and completed in August Transferred to finished goods in August (3) $ Inventory in process, August 31 (4) Total costs assigned by the Roasting Department $ -
Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). 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 $
Under FIFO method of accounting while calculating equivalent units, the units in beginning work in process inventory are also taken int consideration but while calculating the equivalent cost per unit only the cost added during the year is considered.
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