The Alena Manufacturing Company produces one product in two departments, 1002 and 1003.

Direct materials are added at the beginning of Department 1002 and at the end of Department When the direct materials in Department 1003 are added, the number of final units are

, increased. Conversion costs are incurred evenly throughout both departments.

An examination of July’s cost of production reports revealed the following unit cost information: mk4

Transcribed Image Text:

Department 1002 Department 1003 Costs from preceding department: Direct materials Direct labor Factory overhead $.75 .30 .15 $.95 .10 .05 At the end of July, Department 1002 had 62,000 units still in process which were 12.5% complete. Department 1003 had 28,000 units still in process which were 25% complete. During August, the following activity took place: Department 1002 Department 1003 Units started in process Units added to production 139,000 13,000 Units transferred to next department 175.000