Chapter 20, Problem 20.16EX

Cost of production report

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, 700 pounds, 20% completed		$ 3,479*
*Direct materials {700 × $4.70}	$3,290
Conversion {700 × $20% > × $ 1 35}	189
	$3,479
Coffee beans added during August, 14,300 pounds		65,780
Conversion costs during August		21,942
Work in process, August 31,400 pounds, 42% completed		?
Goods finished during August 14,600 pounds

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

1. Direct materials and conversion equivalent units of production for August

2. Direct materials and conversion costs per equivalent unit for August

3. Cost of goods finished during August

4. Cost of work in process at August 31

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July).