Question
E6-9 Calculating unit costs; units gained in productionA company manufactures a liquid product called Crystal. Thebasic ingredients are put into process in Department 1. In
E6-9 Calculating unit costs; units gained in productionA company manufactures a liquid product called Crystal. Thebasic ingredients are put into process in Department 1. In Depart-ment 2, other materials are added that increase the number ofunits being processed by 50%. The factory has only twodepartments.UnitsProduction Summary Dept. 1 Dept. 2Started in process . . . ...................................... 18,000Received from prior department . . . ....................... 14,000Added to units in process. . ............................... 7,000Finished and transferred . . . ............................... 14,000 15,000In process, end of month . . ............................... 4,000 6,000Stage of completionmaterials, labor, andfactory overhead . . ...................................... 1/4 1/2Cost SummaryMaterials. .................................................. $90,000 $36,000Labor . . . . .................................................. 30,000 13,500Factory overhead.......................................... 15,000 4,500Calculate the following for each department: (a) unit cost for themonth for materials, labor, and factory overhead, (b) cost of theunits transferred, and (c) cost of the ending work in process.
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