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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

  1. Baird Cola issued additional common stock for $55,000 cash.
  2. The company purchased raw materials and production supplies for $28,840 and $800, respectively, in cash.
  3. 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.
  4. 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.
  5. The predetermined overhead rate was $1.50 per direct labor hour.
  6. Actual overhead costs other than indirect materials and indirect labor for the year amounted to $940, which was paid in cash.
  7. The mixing department completed 700,000 units of Sweet Spring. The remaining inventory was 30 percent complete.
  8. The completed soft drink was transferred to the bottling department.
  9. The ending balance in the Production Supplies account was $550.

Required

  1. Determine the number of equivalent units of production.

  2. Determine the product cost per equivalent unit.

  3. Calculate the total cost allocated between the ending work in process inventory and units transferred to the bottling department.

  4. Record the transactions in T-accounts.

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