Refer to E5-28A and E5-29A. Assume the Woodson Dairy Forming Department has the following costs per equivalent unit (EU) on its own production cost report for the month of January:
Cost per EU transferred in from Churning Department (see your answer from E5-28A)
Cost per Direct Materials EU 5 $0.10
Cost per Conversion Costs EU 5 $0.15
In E5-28A and E5-29
Data for the Churning Department for January follows:
Units in beginning Work in Process (WIP) inventory........................................100,000 units
Units started during the month (all direct materials, including cream
and salt, are added at the beginning of the churning process).........................1,500,000 units
Units in ending Work in Process (WIP) inventory (40% of the way
through the process)............................................................................................200,000 units
Cost information is as follows:
WIP-Churning Department balance as of January 1:
Direct material cost included in beginning WIP balance..........................................$110,000
Conversion cost included in beginning WIP balance....................................................24,000
Beginning balance, WIP, January 1...........................................................................$134,000
Manufacturing costs incurred during January:
Direct materials used...............................................................................................$1,730,000
Direct labor.....................................................................................................................10,000
Manufacturing overhead..............................................................................................558,000
Total manufacturing costs entered into production during January.......................$2,298,000
Requirements
1. What is the total cost, from start to finish, of producing one pound of butter during January?
2. If the company sells all 1,400,000 pounds of the butter made in January, at a selling price of $2.55 per pound, what is the total gross profit for the month?