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:

Units to be accounted for:
Work in process, April 1 (materials 90% complete; conversion 80% complete)	13,700
Started into production	33,500
Total units to be accounted for	47,200
Units accounted for as follows:
Transferred to next department	40,000
Work in process, April 30 (materials 75% complete; conversion 50% complete)	7,200
Total units accounted for	47,200

Cost Reconciliation
Cost to be accounted for:
Work in process, April 1	$	50,827
Cost added during the month		133,687
Total cost to be accounted for	$	184,514
Cost accounted for as follows:
Work in process, April 30	$	19,314
Transferred to next department		165,200
Total cost accounted for	$	184,514

Management would like some additional information about Cooperative San José’s operations.

Required:

1. What were the Mixing Department's equivalent units of production for materials and conversion for April?

2. What were the Mixing Department's cost per equivalent unit for materials and conversion for April? The beginning inventory consisted of the following costs: materials, $31,099; and conversion cost, $19,728. The costs added during the month consisted of: materials, $81,039; and conversion cost, $52,648.

3. How many of the units transferred out of the Mixing Department in April were started and completed during that month?

4. The manager of the Mixing Department stated, “Materials prices jumped from about $2.20 per unit in March to $2.70 per unit in April, but due to good cost control I was able to hold our materials cost to less than $2.70 per unit for the month.” Should this manager be rewarded for good cost control?

What were the Mixing Department's equivalent units of production for materials and conversion for April?

What were the Mixing Department's cost per equivalent unit for materials and conversion for April? The beginning inventory consisted of the following costs: materials, $31,099; and conversion cost, $19,728. The costs added during the month consisted of: materials, $81,039; and conversion cost, $52,648. (Round your answers to 2 decimal places.)

	Materials Conversion Cost per equivalent unit

	Materials Conversion Equivalent units of production

How many of the units transferred out of the Mixing Department in April were started and completed during that month?

	Units started and completed during April

The manager of the Mixing Department stated, “Materials prices jumped from about $2.20 per unit in March to $2.70 per unit in April, but due to good cost control I was able to hold our materials cost to less than $2.70 per unit for the month.” Should this manager be rewarded for good cost control?

	Yesradio button unchecked1 of 2 Noradio button unchecked2 of 2

Answer 1

1. *Equivalent units for material = 45,400;

*Equivalent units for conversion = 43,600;

2. *Cost per Equivalent unit pf production- Material = $2.47;

*Cost per Equivalent unit pf production-Conversion = $1.66;

3. * Units completed and Transferred = 26,300 units.

4. Materials proces jumped from $2.20 per unit to $2.70 per unit in april. Due to some cost control, Manager should be hold the materials cost, It exceeds the maximum limit of $2.70 per unit. (Lower than $2.70). No, manager cannot be rewared for the cost of material is 2.47 per unit.No extra efforts taken by him.

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*Weighted-Average:
*It calculates the equiavlent-unit cost of the work done to date and assigns this cost to equiavlent units
completed and transferred out of the process and to equivalent units in ending WIP inventory.
*The weighted-average cost is the total of all costs entering WIP account divided by total equivalent units
of work done to date.
*Equivalent units in Beginning WIP + Equivalent units of work done in current period = Equivalent units completed and transferred out in current period + Equivalent units in Ending WIP.
*Cost per Equivalent unit of production = Cost of beginning WIP + Started = Total Costs divided by Equivalent units.

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Unit Reconcilation Beginning WIP Started Cost Charged to account for: Completed Ending WIP Total units accounted for: ITTI 13,700 33,500 47,200 40,000 7,200 47,200 Cost Reconcilation Costs to be accounted for: Cost of beginning WIP Cost added to production during the period Total Cost to be accounted for: Costs accounted for as follow: Cost of Ending WIP Costs of units transferred out Total Cost to be accounted for: $ $ $ 50,827 133,687 184,514 $ $ $ 19,314 165,200 184,514 Equivalent units of production Completed Ending WIP Total UNITS Units 40,000 7,200 47,200 % of Material EUP-Material Conversion EUP-Conversion 100% 40,000 100% 40,000 75% 5,400 50% 3,600 45,400 43,600 In Equivalent units-% completion with beginning WIP is immaterial. In Equivalent units-% completion with ending WIP - Take as it is. In Equivalent units-% completed Units - 100% Cost per Equivalent unit of production Beginning WIP Started Total Costs Div, Equivalent units Cost per Equivalent unit of production 13,700 33,500 47,200 EUP-Material S 31,099 $ 81,039 $ 112,138 45,400 $ 2.47 EUP -Conversion $ 19,728 $ 52,648 $ 72,376 43,600.0 $ 1.66 $ 4.13 Costs EUP Costs EUP 1. *Equivalent units for material = 45,400; *Equivalent units for conversion = 43,600; 2. *Cost per Equivalent unit pf production- Material = $2.47; *Cost per Equivalent unit pf production-Conversion = $1.66; Total costs accounted for: Cost of units transferred out: Direct Material Conversion cost 3. * Units completed and Transferred = 26,300 U=units. Cost of Ending WIP: Direct Material Conversion cost EUP Cost per EUP Total costs 40,000 $ 2.47 $ 98,800 40,000 $ 1.66 $ 66,400 $ 165,200 EUP Cost per EUP Total costs 5,400 $ 2.47 $ 13,338 3,600 $ 1.66 $ 5,976 $ 19,314 $ 184,514 4. Materials proces jumped from $2.20 per unit to $2.70 per unit in april. Due to some cost control, Manager should be hold the materials cost, It exceeds the maximum limit of $2.70 per unit. (Lower than $2.70) No, manager cannot be rewared for the cost of material is 2.47 per unit. No extra efforts taken by him. Total costs accounted for

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