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: 5.000 29,000 34,000 Units to be accounted fort Work in process, April 1 (materials 901 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 758 complete; conversion 501 complete) Total units accounted for 30,000 4.000 34,000 Cost Reconciliation Cost to be accounted for: Work in process, April 1 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 $ 13,400 87,800 $ 101,200 $ 8.200 93.000 $ 101,200

Answer 1

1
	Materials	Conversion
Units completed and transferred out	30000	30000
Work in process, ending:
4000 X 75%	3000
4000 X 50%		2000
Equivalent units of production	33000	32000
2
	Materials	Conversion
Work in process, April 1	9000	4400
Cost added during April	57000	30800
Total costs	66000	35200
Divide by Equivalent units of production	33000	32000
Cost per Equivalent unit	2.00	1.10
3
Units started and completed	25000	=30000-5000
4
No, the manager should not be rewarded for good cost control.