Question
Fresh Seasons is a contract manufacturer for Delectable Dressing Company. Fresh Seasons uses a weighted average process costing system to account for its salad dressing
Fresh Seasons is a contract manufacturer for Delectable
Dressing Company. Fresh Seasons uses a weighted average process costing system to
account for its salad dressing production. All ingredients are added at the start of the
process. Delectable provides reusable vats to Fresh Seasons for the completed product
to be shipped to Delectable for bottling, so Fresh Seasons incurs no packaging costs.
Production and cost information for Fresh Seasons during April 2013 follow.
Gallons of dressing in beginning WIP Inventory 36,000
Gallons completed during April 242,000
Gallons of dressing in ending WIP Inventory 23,500
Costs of beginning WIP Inventory
Direct material $183,510
Direct labor 98,526
Overhead 78,273
Costs incurred in April
Direct material $1,136,025
Direct labor 451,450
Overhead 723,195
April beginning and ending WIP inventories had the following percentages of completion
for labor and overhead:
April 1 April 30
Direct labor 55% 15%
Overhead 70% 10%
a. How many gallons of dressing ingredients were started in April?
b. What is the total cost of the goods transferred out during April?
c. What is the cost of April
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