Answer:
Healthway
Cost of production:
Mixing Tableting
Beginning inventory $504 $222
Current period 15,432 22,007
Total cost $15,936 $22,229
Equivalent units:
Mixing Tableting
Transferred out 125 gallons 198,000 capsules
Ending inventory 3 (6 * 50%) 2,400 (6,000 * 40%)
Total equivalent unit 128 200,400
Cost per equivalent unit:
Mixing Tableting
Total cost $15,936 $22,229
Total equivalent units 128 200,400
Cost per equivalent unit $124.50 $0.11
Assignment of costs:
Mixing Tableting
Transferred out $15,563 ($124.50 * 125) $21,780 ($0.11 * 198,000)
Ending inventory 373 ($124.50 * 3) 264 ($0.11 * 2,400)
Total costs $15,936 $22,044
Explanation:
a) Data and Calculations:
1 gallon of powered mix = 1,600 capsules
50 capsules = 1 bottle
Departments Mixing Tableting Bottling
Beginning inventories:
Physical units 5 gallons 4,000 capsules
Costs:
Direct materials $120 $32
Direct labor 128 20
Overhead 256 30
Transferred in - 140
Total costs $504 $222
Current production
Transferred out 125 gallons 198,000 capsules
Ending inventory 6 6,000
Costs:
Direct materials $3,144 $1,584
Transferred in - 15,563
Direct labor 4,096 1,944
Overhead 8,192 2,916
Total costs $15,432 $22,007
Percentage of completion
Beginning inventory 40% 50%
Ending inventory 50 40
Overhead applied:
Mixing department = 200% of direct labor
Tableting department = 150% of direct labor
