You have recently been appointed as the cost accountant for Crane Hair Co. Ltd., a manufacturer of hair shampoo. Your first task is to clear up the production records of the mixing department for November 2022. You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previous department use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point in processing. You also find out that the beginning inventory for the month of November was 4,520 units with the following costs: Transferred-in costs Direct materials Conversion costs $18,080 3,957 26,986 In addition, during November, 18,080 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,650 units that were 60% complete. During the month, direct materials of $29,830 were added and 9,610 hours of direct labour were used at a wage rate of $12 per hour. The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 135,600 hours and a cost function derived from the following overhead equation: Y = 67,800 + 2X, where Y is the total overhead costs and X is the direct labour hours. Using weighted-average process costing techniques, calculate the following for the mixing department for November 2022:
You have recently been appointed as the cost accountant for Crane Hair Co. Ltd., a manufacturer of hair shampoo. Your first task is to clear up the production records of the mixing department for November 2022. You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previous department use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point in processing. You also find out that the beginning inventory for the month of November was 4,520 units with the following costs: Transferred-in costs Direct materials Conversion costs $18,080 3,957 26,986 In addition, during November, 18,080 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,650 units that were 60% complete. During the month, direct materials of $29,830 were added and 9,610 hours of direct labour were used at a wage rate of $12 per hour. The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 135,600 hours and a cost function derived from the following overhead equation: Y = 67,800 + 2X, where Y is the total overhead costs and X is the direct labour hours. Using weighted-average process costing techniques, calculate the following for the mixing department for November 2022:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 22E: Fordman Company has a product that passes through two processes: Grinding and Polishing. During...
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