Question

Cooperative San José of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavoring for drinks and for use in desserts. The bottles are sold for $12 each. The first stage in the production process is carried out in the Mixing Department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted average method in its process costing system A hastily prepared report for the Mixing Department for April appears below: 30.000 200,000 230,000 Units to be accounted for: Work in process, April 1 (materials 908 complete conversion 800 complete) Started into production Total units to be accounted for Units accounted for as follows: Transferred to next department Work in process, April 30 (materials 750 complete conversion 601 complete) Total units accounted for 190,000 40.000 230,000 $ 98,000 827,000 $ 925,000 Cost Reconciliation Cost to be accounted for Work in process, Aprili Cost added during the month Total cost to be accounted for cost accounted for as follows: Work in process, April 30 Transferred to next department Total cost accounted for $ 119,400 305,600 $925.000

Answer 1

Required 1
						Materials	CC
	Equivalent units of production					220000	214000
	working notes:						EUP		EUP
					units	%-mat	Materials	%-CC	CC
	units trasnsferred to next department				190,000	100%	190000	100%	190000
	Ending work in process				40,000	75%	30000	60%	24000
	Equivalent units of production				230,000		220000		214000
Required 2
						Materials	CC
	cost per equivalent units					2.94	1.3
						materials	CC	total
	Beginning work in process cost					67,800	30,200	98,000
	cost added during the year					579,000	248,000	827,000
	total cost added					646,800	278,200	925,000
	equivalent units					220000	214000
	cost per equivalent units					2.94	1.3	4.24
Required 3
	Units started and completed during April					160,000
Required 4	No .The manager should not be rewarded .In weighted average method, the costs of prior
	period get mixed with the costs of current period.Thus if cost in March is							2.5
	and in April it is		3	,the average cost would be less than				3
	in the weighted average cost method.