Question

1. Spring Fresh produces premium bottled water. Fresh Spring 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 205 comma 000 ​liters:________.
A. Wages of workers operating filtration equipment $25,950
B. Manufacturing overhead allocated to filtration 20,000
C. Water 80,000
2. Spring Fresh had no beginning Work-in Process Inventory in Filtration Department in February.
A. Compute the February conversion costs in the Filtration Department.
B. The Filtration Department completely processed 150,000 liters in February. What was the filtration cost per liter?

Answer 1

Answer:

A. $45,950

B. $0.84 per liter.

Explanation:

A. February conversion costs in the Filtration Department:

= Direct labor costs(Wages of workers operating filtration equipment) + Manufacturing overhead allocated to filtration

= $25,950 + $20,000

= $45,950

B. Filtration Department completely processed 150,000 liters in February.

Total cost incurred:

= Direct labor costs + Manufacturing overhead allocated to filtration + Water

= $25,950 + $20,000 + $80,000

= $125,950

Filtration cost per liter:

= Total cost incurred ÷ Total units processed

= $125,950 ÷ 150,000

= $0.84 per liter.