Question
Arctic Springs produces premium bottled water. Arctic SpringsArctic Springs purchases artesian? water, stores the water in large? tanks, and then runs the water through two?
Arctic Springs produces premium bottled water. Arctic SpringsArctic Springs purchases artesian? water, stores the water in large? tanks, and then runs the water through two? processes: filtration and bottling. At Arctic SpringsArctic Springs?, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. During? February, the filtration process incurred the following costs in processing 220,000 ?litres:
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Wages of workers operating the filtration equipment | $12,500 | |
Wages of workers operating ozonation equipment | 16,500 | |
Manufacturing overhead allocated to filtration | 24,050 | |
Water | 140,000 | |
Arctic Springs | |||||
Filtration Department | |||||
Flow of Physical Units and Computation of Equivalent Units | |||||
Flow of | Equivalent Units | ||||
Physical | Direct | Conversion | |||
Flow of Production | Units | Materials | Costs | ||
Units to account for: | |||||
Beginning work in process, February 1 | 0 | ||||
Started in production during February | 220,000 | ||||
Total physical units to account for | 220,000 | ||||
Units accounted for: | |||||
Completed and transferred out during February | 135,000 | 135,000 | 135,000 | ||
Ending work in process, February 28 | 85,000 | 85,000 | 68,000 | ||
Total physical units accounted for | 220,000 | ||||
Total equivalent units | 220,000 | 203,000 | |||
Arctic Springs | ||||
Filtration Department | ||||
Cost per Equivalent Unit | ||||
| Direct | Conversion | ||
Flow of Production | Materials | Costs | ||
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Total costs to account for |
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Cost per equivalent unit |
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