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Baird Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Bairds beginning balances and data pertinent to
Baird Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Bairds beginning balances and data pertinent to the mixing departments activities for 2018 follow:
Accounts | Beginning Balances | ||
Cash | $ | 47,000 | |
Raw materials inventory | 14,500 | ||
Production supplies | 100 | ||
Work in process inventory (410,000 units) | 49,200 | ||
Common stock | $ | 95,300 | |
- Baird Cola issued additional common stock for $55,000 cash.
- The company purchased raw materials and production supplies for $28,840 and $800, respectively, in cash.
- The company issued $31,210 of raw materials to the mixing department for the production of 600,000 units of Sweet Spring that were started in 2018. A unit of soft drink is the amount needed to fill a bottle.
- The mixing department used 2,300 hours of labor during 2018, consisting of 2,100 hours for direct labor and 200 hours for indirect labor. The average wage was $9.30 per hour. All wages were paid in 2018 in cash.
- The predetermined overhead rate was $1.50 per direct labor hour.
- Actual overhead costs other than indirect materials and indirect labor for the year amounted to $940, which was paid in cash.
- The mixing department completed 700,000 units of Sweet Spring. The remaining inventory was 30 percent complete.
- The completed soft drink was transferred to the bottling department.
- The ending balance in the Production Supplies account was $550.
Required
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Determine the number of equivalent units of production.
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Determine the product cost per equivalent unit.
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Calculate the total cost allocated between the ending work in process inventory and units transferred to the bottling department.
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Record the transactions in T-accounts.
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