Jacson Company produces two brands of a popular pain medication; regular strength and extra strength. Regular strength is produced in tablet form and extra strength is produced in capsule form. All materials needed for each batch are requisitioned at the start. The work orders for two batches of the products are shown below, along with some associated cost information:

In the Mixing Department, conversion costs are applied on the basis of direct labor hours. Budgeted conversion costs for the department for the year were $60,000 for labor and $190,000 for overhead. Budgeted direct labor hours were 5,000. It takes one minute to mix the ingredients needed for a 100-unit bottle (for either product).
In the Bottling Department, conversion costs are applied on the basis of machine hours.
Budgeted conversion costs for the department for the year were $400,000. Budgeted ma¬
chine hours were 20,000. It takes one-half minute to fill a bottle of 100 units.
Required:
1. What are the conversion costs applied in the Mixing Department for each batch? The Bottling Department?
2. Calculate the cost per bottle for the regular and extra strength pain medication.
3. Prepare the journal entries that record the costs of the 12,000 regular strength batch as it moves through the various operations.
4. Suppose that the materials are requisitioned by the each department as needed for a batch. For the 12,000 regular strength batch, materials are requisitioned for the Mixing and Bottling Departments. Assume that the amount of cost is split evenly between the two departments. How will this change the journal entries made in Requirement 3?

Transcribed Image Text:

Direct materials (actual costs): Applied conversion costs: Mixing Tableting Work Order 121 (Regular Strength) $ 9,000 ? 5,000 Work Order 122 (Extra Strength) $15,000 ? Encapsulating - 6,000 Bottling ? Batch size (bottles of 100 units) 12,000 18,000