Wholesome Bread makes and supplies bread throughout the western United States.

Six operations describe the production process.

a. Flour, milk, yeast, salt, butter, and so on are mixed ina large vat.

b. A conveyor belt transfers the dough to a machine that weighs it and shapes it into loaves.

The individual loaves are allowed to sit and rise.

d. The dough is moved to a 100-foot-long funnel oven (the dough enters the oven on racks and spends 20 minutes moving slowly through the oven).

e. The bread is removed from the oven, sucked from the pan by a vacuum, and allowed to cool.

f. The bread is sliced and wrapped.

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During the week, 4,500 loaves of bread were produced. The total cost of materials

(ingredients and wrapping material) was $675. The cost of direct labor and overhead totaled $1,575. There were no beginning or ending work-in-process inventories.

Required:

1. Compute the unit cost for the 4,500 loaves of bread produced during the week.

2. Would Wholesome Bread ever need to worry about using FIFO or weighted average? Why or why not? What implication does this have for the food industry in general?

3. Suppose that Wholesome Bread also produces rolls and buns, and that the only difference is that the machine is set to shape the dough differently. What adjustments would need to be made to cost out the three different bread products? LO3