Cooperative San José of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and prized as a flavoring for drinks and desserts. The bottles are sold for $12 each. The first stage in the production process occurs in the Mixing Department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted average method of process costing. A hastily prepared report for the Mixing Department for April appears below: Units to be accounted for: Work in process, April 1 (materials 90% complete; conversion 80% complete )30,000Started into production 200,000 Total units to be accounted for 230,000 Units accounted for as follows: Transferred to next department190,000 Work in process, April 30 (materials 75% complete; conversion 60% complete)40,000 Total units accounted for230,000 Cost Reconciliation Cost to be accounted for: Work in process, April 1$ 98,000Cost added during the month827,000 Total cost to be accounted for$925,000Cost accounted for as follows: Work in process, April 30$ 119,400 Transferred to next department805, 600 Total cost accounted for$ 925,000 Management would like some additional information about Cooperative San Jose's operations. Required: What were the Mixing Department's equivalent units of production for materials and conversion for April? What were the Mixing Department's costs per equivalent unit for materials and conversion for April? The beginning inventory included materials, $67,800; and conversion cost, $30,200. The costs added during the month consisted of materials, $579,000; and conversion cost, $248,000. How many of the units transferred out of the Mixing Department in April were started and completed during that month? The manager of the Mixing Department stated, "Materials prices jumped from about $2.50 per unit in March to $3 per unit in April, but due to good cost control I was able to hold our materials cost to less than $3 per unit for the month." Should this manager be rewarded for good cost control?

Cooperative San José of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and prized as a flavoring for drinks and desserts. The bottles are sold for $12 each. The first stage in the production process occurs in the Mixing Department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted average method of process costing. A hastily prepared report for the Mixing Department for April appears below: Units to be accounted for: Work in process, April 1 (materials 90% complete; conversion 80% complete )30,000Started into production 200,000 Total units to be accounted for 230,000 Units accounted for as follows: Transferred to next department190,000 Work in process, April 30 (materials 75% complete; conversion 60% complete)40,000 Total units accounted for230,000 Cost Reconciliation Cost to be accounted for: Work in process, April 1$ 98,000Cost added during the month827,000 Total cost to be accounted for$925,000Cost accounted for as follows: Work in process, April 30$ 119,400 Transferred to next department805, 600 Total cost accounted for$ 925,000 Management would like some additional information about Cooperative San Jose's operations. Required: What were the Mixing Department's equivalent units of production for materials and conversion for April? What were the Mixing Department's costs per equivalent unit for materials and conversion for April? The beginning inventory included materials, $67,800; and conversion cost, $30,200. The costs added during the month consisted of materials, $579,000; and conversion cost, $248,000. How many of the units transferred out of the Mixing Department in April were started and completed during that month? The manager of the Mixing Department stated, "Materials prices jumped from about $2.50 per unit in March to $3 per unit in April, but due to good cost control I was able to hold our materials cost to less than $3 per unit for the month." Should this manager be rewarded for good cost control?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 38P: Healthway uses a process-costing system to compute the unit costs of the minerals that it produces....

See similar textbooks