Tonbridge Corporation makes a health beverage named Tonbridge that is manufactured in a two-stage production process. The drink is first created in the Conversion Department where material ingredients (natural juices, supplements, preservatives, etc.) are combined. On July 1, Year 2, the company had a sufficient quantity of partially completed beverage mix in the Conversion Department to make 50,000 containers of Tonbridge. This beginning inventory had a cost of $80,000. During July, the company added ingredients necessary to make 190,000 containers of Tonbridge. The cost of these ingredients was $400,000. During July, liquid mix representing 180,000 containers of the beverage was transferred to the Finishing Department. The beverage mix is poured into containers and packaged for shipment in the Finishing Department. Beverage that remained in the Conversion Department at the end of July was 20 percent complete. At the beginning of July the Finishing Department had 10,000 containers of beverage mix. The cost of this mix was $50,000. The department added $120,000 of manufacturing costs (materials, labor, and overhead) during July. During July, 120,000 containers of Tonbridge were completed. The ending inventory for this department was 50 percent complete at the end of July. Required a. Prepare a Cost of Production Report for the Conversion Department for July. b. Prepare a Cost of Production Report for the Finishing Department for July. c. If 100,000 containers of Tonbridge are sold in July for $760,000, determine the company's gross margin for July.
Tonbridge Corporation makes a health beverage named Tonbridge that is manufactured in a two-stage production process. The drink is first created in the Conversion Department where material ingredients (natural juices, supplements, preservatives, etc.) are combined. On July 1, Year 2, the company had a sufficient quantity of partially completed beverage mix in the Conversion Department to make 50,000 containers of Tonbridge. This beginning inventory had a cost of $80,000. During July, the company added ingredients necessary to make 190,000 containers of Tonbridge. The cost of these ingredients was $400,000. During July, liquid mix representing 180,000 containers of the beverage was transferred to the Finishing Department. The beverage mix is poured into containers and packaged for shipment in the Finishing Department. Beverage that remained in the Conversion Department at the end of July was 20 percent complete. At the beginning of July the Finishing Department had 10,000 containers of beverage mix. The cost of this mix was $50,000. The department added $120,000 of manufacturing costs (materials, labor, and overhead) during July. During July, 120,000 containers of Tonbridge were completed. The ending inventory for this department was 50 percent complete at the end of July. Required a. Prepare a Cost of Production Report for the Conversion Department for July. b. Prepare a Cost of Production Report for the Finishing Department for July. c. If 100,000 containers of Tonbridge are sold in July for $760,000, determine the company's gross margin for July.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Tonbridge Corporation makes a health beverage named Tonbridge that is manufactured in a two-stage production
process. The drink is first created in the Conversion Department where material ingredients (natural juices,
supplements, preservatives, etc.) are combined. On July 1, Year 2, the company had a sufficient quantity of partially
completed beverage mix in the Conversion Department to make 50,000 containers of Tonbridge. This beginning
inventory had a cost of $80,000. During July, the company added ingredients necessary to make 190,000 containers of
Tonbridge. The cost of these ingredients was $400,000. During July, liquid mix representing 180,000 containers of the
beverage was transferred to the Finishing Department. The beverage mix is poured into containers and packaged for
shipment in the Finishing Department. Beverage that remained in the Conversion Department at the end of July was 20
percent complete. At the beginning of July the Finishing Department had 10,000 containers of beverage mix. The cost
of this mix was $50,000. The department added $120,000 of manufacturing costs (materials, labor, and overhead)
during July. During July, 120,000 containers of Tonbridge were completed. The ending inventory for this department
was 50 percent complete at the end of July.
Required
a. Prepare a Cost of Production Report for the Conversion Department for July.
b. Prepare a Cost of Production Report for the Finishing Department for July.
c. If 100,000 containers of Tonbridge are sold in July for $760,000, determine the company's gross margin for July.
Complete this question by entering your answers in the tabs below.
Required Required Required
A
B
с
Prepare a Cost of Production Report for the Conversion Department for July. (Round "Cost
per unit" answer to 2 decimal places.)
TONBRIDGE CORPORATION
Cost of Production Report
Conversion Department
For the month ended July 31, Year 2
Computation for Physical Units and Equivalent Units
Beginning inventory
Units added to production
Total to be accounted for
Transferred to the finishing
department
Ending inventory
Total accounted for
Cost per Unit
Cost accumulation
Beginning inventory
Cost added to production
Total to be accounted for
Cost per unit
Cost Allocation
To the finishing department
To ending work in process
inventory
Total allocated cost
Actual Equivalent
units
units
< Required A
Required B >
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Hi, for part c, can I please ask where did you get the $4 from?
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