Cost of production report PR 32A Fresh Mountain Coffee Compa

Cost of production report PR 3-2A Fresh Mountain Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee r eans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at March 31, 2016: ACCOUNT Work in Process-Roasting Department ACCOUNT NO Balance Credit Debit Date Item Debit Credit Mar. | 1 | Bal., 1,500 units, 30% completed 31 Direct materials, 22,300 units 31 Direct labor 31 Factory overhead 31 Goods transferred, 21,700 units 31/ Bal, 2 units, 40% completed 6,150 93,120 105,020 110,792 86,970 11,900 5,772 Instructions 1. Prepare a cost of production report, and identify the missing amounts for Work in Process-Roasting Department. 2. Assuming that the March 1 work in process inventory includes $5,700 of direct ma- terials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March.

Solution

Part 2 March 1, work in process $        6,150 Less: direct materials            5,700 Conversion costs                450 Conversion cost equivalent units: Units in process            1,500 Percent complete x 30% Equivalent Units                450 Direct Materials Conversion March costs per equivalent unit (from part 1) $3.90 $0.80 February costs per equivalent unit Total costs in work in process, March 1 5700 450 Total equivalent units 1500 450 Cost per equivalent unit 3.8 1 Increase(Decrease) $0.10 ($0.20)