Calculating unit costs; units gained in production
A company manufactures a liquid product called Glitter. The basic ingredients are put into process in Department 1. In Department 2, other materials are added that increase the number of units being processed by 50%. The factory has only two departments.
Cost Summary
Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $90,000
$36,000
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 13,500
Factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 4,500
Calculate the following for each department: (a) unit cost for the month for materials, labor, and factory overhead, (b) cost of the units transferred, and (c) cost of the work in process.
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