Honeybutter, Inc., manufactures a product that goes through two departments prior to completion-the Mixing Department followed by the Packaging Department. The following information is available about work in the first department, the Mixing Department, during June. Units Materials Conversion Work in process inventory, Junel 70,000 Work in process inventory, June 30 80,000 70% 40% 75% 25% Materials Conversion $ 36,650 $ 13,500 Work in process inventory, June 1 Cost added during June 391,750 287,300 During June, 450,000 units were completed and transferred to the Packaging Department. Required: a. Determine the equivalent units for June for the Mixing Department. b. Compute the costs per equivalent unit for June for the Mixing Department. c. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please answer question 2

Question 1
Sandar Company is highly automated and uses computers to control manufacturing
operations. The company uses a job-order costing system and applies manufacturing
overhead cost to products on the basis of computer-hours. The following estimates
were used in preparing the predetermined overhead rate at the beginning of the year:
Computer-hours
90,000
Fixed manufacturing overhead cost
$1,278,000
Variable manufacturing overhead per computer-hour
$5.30
During the year, a severe economic recession resulted in cutting back production and
a buildup of inventory in the company's warehouse. The company's cost records
revealed the following actual cost and operating data for the year ended 31 December
2019:
Computer-hours
85,000
Purchase of raw materials
$7,890,000
Direct labor cost
$1,722,000
Manufacturing overhead costs:
$ 88,000
Insurance, factory .
Depreciation of equipment
170,000
Indirect material..
12,000
Indirect labor.
327,000
Property taxes
85,000
Maintenance.
630,000
Rent, building
360,000
Beginning
Ending
Raw Materials
$1,770,000
S 900,000
Work in Process
960,000
870,000
Finished Goods
1,110,000
1,860,000
Transcribed Image Text:Question 1 Sandar Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year: Computer-hours 90,000 Fixed manufacturing overhead cost $1,278,000 Variable manufacturing overhead per computer-hour $5.30 During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year ended 31 December 2019: Computer-hours 85,000 Purchase of raw materials $7,890,000 Direct labor cost $1,722,000 Manufacturing overhead costs: $ 88,000 Insurance, factory . Depreciation of equipment 170,000 Indirect material.. 12,000 Indirect labor. 327,000 Property taxes 85,000 Maintenance. 630,000 Rent, building 360,000 Beginning Ending Raw Materials $1,770,000 S 900,000 Work in Process 960,000 870,000 Finished Goods 1,110,000 1,860,000
Honeybutter, Inc., manufactures a product that goes through two departments prior to
completion-the Mixing Department followed by the Packaging Department. The
following information is available about work in the first department, the Mixing
Department, during June.
Units Materials Conversion
Work in process inventory, Junel 70,000
Work in process inventory, June 30 80,000
70%
40%
75%
25%
Materials Conversion
$ 36,650
$ 13,500
Work in process inventory, June 1
Cost added during June
391,750
287,300
During June, 450,000 units were completed and transferred to the Packaging
Department.
Required:
a. Determine the equivalent units for June for the Mixing Department.
b. Compute the costs per equivalent unit for June for the Mixing Department.
c. Determine the total cost of ending work in process inventory and the total cost of
units transferred to the Packaging Department.
Transcribed Image Text:Honeybutter, Inc., manufactures a product that goes through two departments prior to completion-the Mixing Department followed by the Packaging Department. The following information is available about work in the first department, the Mixing Department, during June. Units Materials Conversion Work in process inventory, Junel 70,000 Work in process inventory, June 30 80,000 70% 40% 75% 25% Materials Conversion $ 36,650 $ 13,500 Work in process inventory, June 1 Cost added during June 391,750 287,300 During June, 450,000 units were completed and transferred to the Packaging Department. Required: a. Determine the equivalent units for June for the Mixing Department. b. Compute the costs per equivalent unit for June for the Mixing Department. c. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department.
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