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i) Honeybutter Pty Ltd manufactures a product that goes through two departments prior to completion-the Mixing Department followed by the Packaging Department. The following information
i) Honeybutter Pty Ltd manufactures a product that goes through two departments prior to completion-the Mixing Department followed by the Packaging Department. The following information is available about work in the first department, the Mixing Department, during June. Required: Assume that the company uses the weighted-average method. (a) Determine the physical units of the ending inventory in June for the Mixing Department (1 mark) (b) Determine the equivalent units for June for the Mixing Department (2 marks) (c) Compute the costs per equivalent unit for June for the Mixing Department (3 marks) (d) Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department (2 marks) ii) Mannon Company's accountant exclaimed, 'our cost accounting system allocates overhead based on direct labour hours, but our overhead costs appear to be more related to set-up activities than to the use of direct labour. It seems as though our costing system allocates too much cost to large batches of product and not enough cost to small batches.' Do you agree with this statement? Discuss why ( 3 marks)
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