Answer:
Bavarian Chocolate Company
Blending Department
1. Cost of Production Report:
Cost of production: Materials Conversion Total
Beginning WIP $37,950 $8,418 $46,368
Direct materials, 26,000 units 429,000 149,040 578,040
Total cost or production $466,950 $157,458 $624,408
(See the workings of this report below.)
2. Change in direct materials cost per equivalent unit
Increase or Decrease
Materials Conversion
September $16.50 $6.005
October $16.51 $5.99
Amount $0.01 $0.015
Increase Decrease
Explanation:
a) Data and Calculations:
partial work in process account of the Blending Department at October 31, 2014:
Date Item Debit Credit Balance
Oct.1 Bal., 2,300 units, 3/5 completed 46,368
31 Direct materials, 26,000 units 429,000 475,368
31 Direct labor 100,560 575,928
31 Factory overhead 48,480 624,408
31 Goods transferred, 25,700 units 578,378 46,030
31 Bal., 2,600 units, 1/5 completed 46,030
Ending units in process:
Beginning units in process 2,300
Direct materials 26,000
Units available for production 28,300
Units transferred out 25,700
Ending units in process 2,600
Equivalent units of production: Materials Conversion
Units started and completed = 25,700 25,700 25,700
Ending WIP 2,600 2,600 520 (1/5 * 2,600)
Equivalent units produced 28,300 26,220
Cost per unit of direct materials = $429,000/26,000 = $16.50
Cost of production: Materials Conversion Total
Beginning WIP $37,950 $8,418 $46,368
Direct materials, 26,000 units 429,000 149,040 578,040
Total cost or production $466,950 $157,458 $624,408
Cost per equivalent unit: Materials Conversion
Total cost or production $466,950 $157,458
Equivalent units produced 28,300 26,220
Cost per equivalent unit $16.50 $6.005
Assignment of cost to units completed and ending WIP:
Materials Conversion Total
Units transferred out (25,700) $424,050 $154,328 $578,378
Ending WIP (2,600/520) 42,900 3,130 46,030
Total $466,950 $157,458 $624,408
2. Assuming that the October 1 work in process inventory includes direct materials of $38,295, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between September and October.
Cost of production: Materials Conversion Total
Beginning WIP $38,295 $8,073 $46,368
Direct materials, 26,000 units 429,000 149,040 578,040
Total cost or production $467,295 $157,113 $624,408
Cost per equivalent unit: Materials Conversion
Total cost or production $467,295 $157,113
Equivalent units produced 28,300 26,220
Cost per equivalent unit $16.51 $5.99
Assignment of cost to units completed and ending WIP:
Materials Conversion Total
Units transferred out (25,700) $424,307 $153,943 $578,250
Ending WIP (2,600/520) 42,926 3,115 46,041
Total $467,233 $157,058 $624,291
