Belgian Delight Chocolate Company processes chocolate into candy bars. The process begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Department. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the Molding Department, where the milk chocolate is formed into candy bars. The following is a partial work in process account of the Blending Department at March 31, 2008:
|
ACCOUNT Work in Process—Blending Department |
ACCOUNT NO. |
|||||
|
|
|
|
|
Balance |
||
|
Date |
Item |
Debit |
Credit |
Debit |
Credit |
|
|
Mar. |
1 |
Bal., 9,000 units, 20% |
|
|
|
|
|
|
|
completed |
|
|
28,260 |
|
|
|
31 |
Direct materials, 300,000 units |
870,000 |
|
898,260 |
|
|
|
31 |
Direct labor |
128,450 |
|
1,026,710 |
|
|
|
31 |
Factory overhead |
100,300 |
|
1,127,010 |
|
|
|
31 |
Goods finished, 305,000 units |
|
? |
|
|
|
|
31 |
Bal. ? units, 45% completed |
|
|
? |
|
Instructions
1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Blending Department.
2. Assuming that the March 1 Work in Process inventory includes direct materials of $27,000, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and March.