Chapter 18, Problem 18.17EX

Cost of production report

The Cutting Department of Karachi Carpet Company provides the following data for January 2016. Assume that all materials are added at the beginning of the process.

Work in process. January 1, 1,400 units. 75% completed		$ 22,960*
*Direct materials (1,400 × $12.65)	517,710
Conversion (1,400 × 75% × $ .00)	5,250
	$22,960
Materials added during January from Weaving Department, 58,000 units		$742,400
Direct labor for January		134,550
Factory overhead for January		151,611
Goods finished during January (includes goods in process, January 1), 5,.200 units		—
Work in process. January 31, 3,200 units, 30% completed		—

1. a. Prepare a cost of production report for the Cutting Department.
2. b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December).