Operation Costing; Unit Costs
(Contributed by Roland Minch.) Glass Glow Company manufactures a variety of glass windows in its Egalton plant. In department I, clear glass sheets are produced, and some of these sheets are sold as finished goods. Other sheets made in department I have metallic oxides added in department II to form colored glass sheets. Some of these colored sheets are sold: others are moved to department III for etching and then are sold. The company uses operation costing. Glass Glow Company's production costs applied to products in May are given in the following table. There was no beginning or ending inventory of work in process for May.
CostCategory | Dept. I | Dept. II | Dept. III |
Direct material | $450000 | $72.000 | -0- |
Direct labor | 38,0000 | 22,000 | $ 38,000 |
Manufacturing overhead | 230,000 | 68,000 | 73,750 |
Products | Units | Dept. I Dir.Mat. | Dept. II Dir.Mat. |
Clear glass, sold after dept, I | 11,000 | $247,500 | -0- |
Unetched colored glass, sold after dept, II | 4,000 | 90,000 | $32,000 |
Etched colored glass, sold after dept, III | 5,000 | 112,500 | 40,000 |
Each sheet of glass requires the same steps within each operation.
Required: Compute each of the following amounts.
1. The conversion cost per unit in department I.
2. The conversion cost per unit in department II.
3. The cost of a clear glass sheet.
4. The cost of an unetched colored glass sheet.
5. The cost of an etched colored glass sheet.
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