LO 12-3, 12-4 excel I Problem 12-18A Process costing system Wright Cola Corporat
ID: 2584879 • Letter: L
Question
LO 12-3, 12-4 excel I Problem 12-18A Process costing system Wright Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Wright's beginning balances and data pertinent to the mixing department's activities for 2018 follow: CHECK FIGURE b. $0.14 Accounts Cash Raw materials inventory Production supplies Work in process inventory (400,000 units) Common stock = 1 Beginning Balances $ 50,000 14,800 100 48,000 $112,900 1. Wright Cola issued additional common stock for $80,000 cash. 2. The company purchased raw materials and production supplies for $29,600 and $800, respec- tively, in cash.Explanation / Answer
a. Work in process ,at beginning = 400000 units
Add: Units transferred in = 800000
Total units to account for = 1200000
Units transferred out = 600000
Work in process ,at end = 600000
Total units accounted for = 1200000
Equivalent number of productions:
Units Percentage completed Equivalent units
Units transferred out 600000 100% 600000
Work in process ,at end 600000 25% 150000
750000 units
b. Work in process ,at beginning = $48000
Cost incurred during the year
Direct material = 32360
Direct labor (2200 * $9.6) =21120
Applied overhead[$1.6 * 2200] = 3520
Total cost to account for = $105000
Product cost per equivalent units = $105000 / 750000 units
= $0.14
(c) Units transferred to bottle department [$0.14 * 600000 units ] = $84000
Ending work in process [$0.14 * 150000 units ] = $21000
Total cost = $105000
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