Currently, Bouwens uses a job costing system In which each month's production for each customer type is considered a "Job." Thus,

every month, Bouwens starts and completes one Job in B$-155$ and one Job In B$-159.($There Is never any beginning or ending work In

process at Bouwens.$)$ Recently, a dlspute arose between Jack, the product manager for the milltary solvent, and Jill, the product

manager for the commerclal solvent, over the proper costing system.

Jack: It is ridiculous to use job costing for this. We are producing solvent. Everyone knows that the chemicals are the same. The fact

the B$-155$ has high$-$cost labor is because all the senlor employees want to work there. We could produce the same product with the

employees in B$-159.$ We should be using process costing and consider all the production In both bulldings for each month as the

batch.

Jill: Jack, the fact is that the military requires us to use a special chemical, and their contracts require we keep track of the costs for

thelr business. If we don't separate the costing, we won't know how profitable elther business is$.$

The following is production and cost Information for a typical month, July.

Requlred:

a$.$ Compute the unlt costs of M$-$Solv and C$-$Solv for July using the current system $($Job costing$)$ at Bouwens.

b$.$ Compute the costs of M$-$Solv and C$-$Solv for July If Bouwens were to treat all production as the same $($combining B$-155$ and B$-159$

production$).$

c$.$ Recommend a costing method that best reflects the cost of producing M$-$Solv and C$-$Solv.

d$.$ For your recommended costing system, compute the cost of both M$-$Solv and C$-$Solv for July.

Compute the unlt costs for materlals and conversion costs separately.

Then compute conversion costs for the factory.

Now, compute the unit product cost.

Complete this question by entering your answers in the tabs below.

Compute the unit costs for materials and conversion costs separately.