Question

Sue's Soup Products uses a process costing system with two processing departments: the Mixing and Cooking Department and the Canning Department. Work in process inventories are reduced to zero each month. In March, the Mixing and Cooking Department incurred manufacturing costs of $113,400 to mix 54,000 gallons of soup. The Canning Department incurred manufacturing costs of $9,500. A total of 190,000 cans of soup were transferred to the finished goods warehouse during the month.
Required:
1. The unit cost per can of soup transferred to the finished goods warehouse during March was ___________.

Answer 1

Answer:

$0.65

Explanation:

The unit cost per can of soup transferred to finished goods warehouse during March is the total manufacturing costs incurred by both Mixing and Cooking department and Canning Department divided by the total number of cans of soup transferred.

Both departments incurred $122,900  in manufacturing costs i.e($113,400+$9,500) while the total number of gallons of soup transferred to finished goods warehouse was 190,000 cans

Unit cost per can of soup=$122,900/190,000=$0.65