Answered: Wages of workers operating filtration…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Calculating conversion costs and unit cost—FIFO methodSpring Fresh produces premium bottled water. Spring Fresh purchases artesian Water, stores the water in large tanks, and then runs the water through two processes: filtration and bottling.

During February, the filtration process incurred the following costs in processing 200,000 liters:

Spring Fresh had no beginning Work-in-Process Inventory in the Filtration Department in February.

Requirements

Use the FIFO method to compute the February conversion costs in the Filtration Department.
The Filtration Department completely processed 200,000 liters in February. Use the FIFO method to determine the filtration cost per liter.

Wages of workers operating filtration equipment
Manufacturing overhead allocated to filtration
$ 34,950
19,050
Water
110,000

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