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frez [133]
2 years ago
9

Healthway uses a process-costing system to compute the unit costs of the minerals that it produces. It has three departments: Mi

xing, Tableting, and Bottling. In Mixing, at the beginning of the process all materials are added and the ingredients for the minerals are measured, sifted, and blended together. The mix is transferred out in gallon containers. The Tableting Department takes the powdered mix and places it in capsules. One gallon of powdered mix converts to 1,600 capsules. After the capsules are filled and polished, they are transferred to Bottling where they are placed in bottles, which are then affixed with a safety seal and a lid and labeled. Each bottle receives 50 capsules. During July, the following results are available for the first two departments (direct materials are added at the beginning in both departments):
Mixing Tableting
Beginning inventories:
Physical units 5 gallons 4,000 capsules
Costs:
Direct materials $120 $32
Direct labor 128 20
Overhead
Transferred in 140
Current production
Transferred out 125 gallons 198,000 capsules
Ending inventory 6 6,000
Costs:
Direct materials $3,144 $1,584
Transferred in
Direct labor 4,096 1,944
Overhead
Percentage of completion
Beginning inventory 40% 50%
Ending inventory 50 40
Overhead in both departments is applied as a percentage of direct labor costs. In the Mixing Department, overhead is 200% of direct labor. In the Tableting Department, the overhead rate is 150% of direct labor.
Required:
1. Prepare a production report for the Mixing Department using the weighted average method.
2. Prepare a production report for the Tableting Department.
Business
1 answer:
STALIN [3.7K]2 years ago
7 0

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

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