Work in process, May 1, 1,150 pounds, 40% completed $ 1,700
Coffee beans added during May, 10,900 pounds 28,600
Conversion costs during May 12,504
Work in process, May 31, 800 pounds, 80% completed —
Goods finished during May, 11,250 pounds —
Prepare a cost of production report, using the average cost method.
Answer:
HIGHLANDS COFFEE COMPANY
Cost of Production Report—Roasting Department
For the Month Ended May 31, 2014
UNITS
Whole
Units
Equivalent Units
of Production
Units to account for during production:
Inventory in process, May 1 1,150
Received from materials storeroom 10,900
Total units accounted for by the
Roasting Department 12,050
Units to be assigned cost:
Transferred to finished goods in May 11,250 11,250
Inventory in process, May 31
(80% completed) 800 640*
Total units to be assigned cost 12,050 11,890
* 80% × 800 units
COSTS Costs
Costs per equivalent unit:
Total costs for May in Roasting Department $42,8041
Total equivalent units ÷ 11,890
Cost per equivalent unit $ 3.60
Costs assigned to production:
Inventory in process, May 1 $ 1,700
Costs incurred in May 41,104 2
Total costs accounted for by the Roasting Department $42,804
Costs allocated to completed and partially completed units:
Transferred to finished goods in May
(11,250 units × $3.60) $40,500
Inventory in process, May 31
(800 units × 80% × $3.60) 2,304
Total costs assigned by the Roasting Department $42,804
1 $1,700 + $28,600 + $12,504
2 $28,600 + $12,504