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Equivalent Units and Related Costs; Cost of Production Report; Entries
Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being
introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and
Filling departments, emerging as finished chemicals.
The balance in the account Work in Process—Filling was as follows on January 1:
Work in Process—Filling Department
(5,200 units, 20% completed):
Direct materials (5,200 x $12.40) $64,480
Conversion (5,200 x 20% x $8.10) 8,424
$72,904
The following costs were charged to Work in Process—Filling during January:
Direct materials transferred from Reaction
Department: 67,100 units at $12.20 a unit $818,620
Direct labor 291,310
Factory overhead 279,890
During January, 66,500 units of specialty chemicals were completed. Work in Process—Filling Department on January
31 was 5,800 units, 30% completed.
Required:
- Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter “0”. If
required, round your cost per equivalent unit answers to two decimal places.
Dover Chemical Company
Cost of Production Report-Filling Department
For the Month Ended January 31
Unit Information
Units charged to production:
Inventory in process, January 1 5,200
Received from Reaction Department 67,100
Total units accounted for by the Filling Department 72,300
Units to be assigned costs:
Equivalent Units
Whole
Units
Direct
Materials Conversion
Inventory in process, January 1
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5,200 0 4,160
Started and completed in January 61,300 61,300 61,300
Transferred to finished goods in January 66,500 61,300 65,460
Inventory in process, January 31 5,800 5,800 4,060
Total units to be assigned costs 72,300 67,100 69,520
Cost Information
Costs per equivalent unit:
Direct
Materials Conversion
Total costs for January in Filling Department
$ $
Total equivalent units
Cost per equivalent unit
$ $
Costs charged to production:
Direct
Materials Conversion Total
Inventory in process, January 1
$
Costs incurred in January
Total costs accounted for by the Filling Department
$
Cost allocated to completed and partially completed units:
Inventory in process, January 1 balance
$
To complete inventory in process, January 1
$ $
Cost of completed January 1 work in process
$
Started and completed in January
Transferred to finished goods in January
$
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Inventory in process, January 31
Total costs assigned by the Filling Department
$ - Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the costs transferred from Filling to
Finished Goods.
(1) Work in Process-Filling Department
Work in Process-Reaction Department
(2) Finished Goods
Work in Process-Filling Department - Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials
and conversion costs. If required, round your answers to two decimal places.
Increase or Decrease Amount
Change in direct materials cost per equivalent unit Decrease $
Change in conversion cost per equivalent unit Decrease - The cost of production report may be used as the basis for allocating product costs between Work in Process
and Finished Goods . The report can also be used to control costs by holding each department head responsible for
the units entering production and the costs incurred in the department. Any differences in unit product costs from one
month to another, such as those in part (3), can be studied carefully and any significant differences investigated.
Sample Solution
