Question

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:
ACCOUNT Work in Process—Roasting Department ACCOUNT NO.
Date Item Debit Credit Balance
Debit Credit
July 1 Bal., 30,000 units, 10% completed 121,800
31 Direct materials, 155,000 units 620,000 741,800
31 Direct labor 90,000 831,800
31 Factory overhead 33,272 865,072
31 Goods transferred, 149,000 units ?
31 Bal., ? units, 45% completed ?
Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to the nearest cen

Answer 1

Answer:

Unit Information

Units charged to production:

Inventory in process, July 1                  30000

Received from materials storeroom 155000  

Total units accounted for                       185000

Units to be assigned costs: Equivalent Units

           Whole Units         DM     Conversion

Beginning          30,000    0          27,000

Std and comp  119,000 119,000  119,000

Transferred to  149,000 119,000 146,000

Ending                    36,000  36,000   16,200

Total units         185,000 155,000 162,200

                           Materials Conversion (labor + overhead)

Total costs for the month  620,000 123,272

Total equivalent units      155,000 162,200

Cost per equivalent unit  $4.00       $0.76

                 DM            Conversion           Total

Beginning                                           $121,800.00

Incurred      $620,000.00   $123,272.00   $743,272.00

Total costs accounted for                             $865,072.00

Beginning             $121,800.00

To complete               $20,520.00

Total beginning    $142,320.00

Std and comp          $566,440.00

Trasnferred             $708,760.00

Ending                              $156,312.00

Total costs assigned       $865,072.00

Explanation:

First we calcualte the physical units.

then the equivalent units.

we solve for equialent cost per unit by dividing the cost of the period by the equivalent unit

then, we make the cost reconciliation

notice how the cost accounted (beginning + incurred during the period)

matches the cost assigned (trasnferred + ending WIP inventory)