PR 32B Cost of production report OBJ24 Bavarian Chocolate Co

PR 3-2B Cost of production report OBJ.2,4 Bavarian Chocolate Company processes chocolate into candy bars. The process be 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 October 31, 2016: ACCOUNT Work in Process-Blending Department ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Oct. | 1 | Bal., 2,300 units, ys compl-or- 31 Direct materials, 26,000 31 Direct labor 31 Factory overhead 31 Goods transferred, 25,700 units 31 | Bal.. |units, completed 46,368 475,368 575,928 624,408 429,000 100,560 48,480 Instructions 1. Prepare a cost of production report, and identify the missing amounts for Work in Process-Blending Department. 2. Assuming that the October 1 work in process inventory includes direct materials of s38,295, determine the increase or decrease in the cost per equivalent unit for diredt materials and conversion between September and October.

Solution

Answer 1. Bavarian Chocolate Company Cost of Production Report - Blending Department For the Month ended Oct 31, 2016 Particulars Equivalent Units Physical Units Materials Conversion Costs Units to be accounted for Work in process - Beginning                                       2,300 Started into production                                     26,000 Total units                                     28,300 Units accounted for Goods Units Completed & transferred out: From Beginning WIP                                       2,300                                        -                               920 (0% materials, 40% conversion costs) Started & Completed (25,700 - 2,300)                                     23,400                               23,400                       23,400 Work in process, Ending (28,300 - 25,700)                                       2,600                                 2,600                             520 (100% materials, 20% conversion costs) Equivalent units accounted for                                     28,300                               26,000                       24,840 Materials Conversion Costs Total Total Cost to Account for: WIP, Beginning                       46,368 Cost added in current period                                   429,000                            149,040                     578,040 Total cost to be account for                                   429,000                            149,040                     624,408 Cost added in current period                                   429,000                            149,040                     578,040 Equivalent Units of work done in current Period                                     26,000                               24,840 Cost per Equivalent Unit                                       16.50                                   6.00                         22.50 Assignment of Costs: Goods Units and Completed out (25,700 Units) WIP, Beginning -2,300 Units                                              -                                          -                         46,368 Cost added to Beg. WIP in Current period                                              -                                   5,520                         5,520 (920 Units X $6) Total of Beginning Inventory                                              -                                   5,520                       51,888 Started and completed - 23,400 Units                                   386,100                            140,400                     526,500 (23,400 units X $16.50) (23,400 units X $6) Total Cost of good units completed & transferred out                                   386,100                            145,920                     578,388 WIP, Ending - 2,600 Units                                     42,900                                 3,120                       46,020 (2,600 Units X $16.50) (2,600 Units X $6) Total Cost accounted For                                   429,000                            149,040                     624,408 Answer 2. Calculation of Cost per Unit - Oct 1 Materials Conversion Costs Total WIP - Oct 1, Cost                                     38,295                                 8,073                       46,368 Equivalent No. of Unit - WIP - Oct 1                                       2,300                                 1,380 Cost pet Equivalent Unit                                       16.65                                   5.85                         22.50 Materials Conversion Costs Total Cost per Equivalent Unit - Beginning Inventory                                       16.65                                   5.85                         22.50 Cost per Equivalent Unit -October                                       16.50                                   6.00                         22.50 Increase (Decrease) in Cost per Unit                                       (0.15)                                   0.15                                -