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Cooperative San Jos of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavouring for drinks and desserts. The bottles are sold for $11 each. (The Mexican currency is the peso, denoted by $.) The first stage in the production process is carried out in the Mixing department, which removes foreign matter from the raw materials and mixes the raw materials in the proper proportions in large vats. The company uses the weighted average cost method in its process costing system. A hastily prepared report for the Mixing department for April follows: 34,000 240,000 274,000 240,000 Quantity Schedule Units to be accounted for: Work in process, April 1 (90% materials, 808 conversion cost added last month) Started into production Total units Units accounted for as follows: Transferred to the next department Work in process, April 30 (80% materials, 60% conversion cost added this month) Total units Total Cost Cost to be accounted for: Work in process, April 1 Cost added during the month Total cost Cost Reconciliation Cost accounted for as follows: Transferred to the next department Work in process, April 30 Total cost 34,000 274,000 $ 515,600 728,000 $1,243,600 $1,128,000 115,600 $1,243,600 Cooperative San Jos has just been acquired by another company, and the management of the acquiring company wants some additional information about Cooperative San Jos's operations. COSTS:- Particulars Direct Material Conversion Cost Total Cost Cost to account for: 2,60,880 2,54,720 5,15,600 Cost from Beginning WIP Inventory: Cost added during Period Total Cost to account for 5,14,000 2,14,000 7,28,000 7,74,880 4,68,720 12,43,600 2,67,200 2,60,400 Divided by Equivalent Units Cost per Equivalent Unit $2.9 $1.8 $4.7 Cooperative San Jos of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavouring for drinks and desserts. The bottles are sold for $11 each. (The Mexican currency is the peso, denoted by $.) The first stage in the production process is carried out in the Mixing department, which removes foreign matter from the raw materials and mixes the raw materials in the proper proportions in large vats. The company uses the weighted average cost method in its process costing system. A hastily prepared report for the Mixing department for April follows: 34,000 240,000 274,000 240,000 Quantity Schedule Units to be accounted for: Work in process, April 1 (90% materials, 808 conversion cost added last month) Started into production Total units Units accounted for as follows: Transferred to the next department Work in process, April 30 (80% materials, 60% conversion cost added this month) Total units Total Cost Cost to be accounted for: Work in process, April 1 Cost added during the month Total cost Cost Reconciliation Cost accounted for as follows: Transferred to the next department Work in process, April 30 Total cost 34,000 274,000 $ 515,600 728,000 $1,243,600 $1,128,000 115,600 $1,243,600 Cooperative San Jos has just been acquired by another company, and the management of the acquiring company wants some additional information about Cooperative San Jos's operations. COSTS:- Particulars Direct Material Conversion Cost Total Cost Cost to account for: 2,60,880 2,54,720 5,15,600 Cost from Beginning WIP Inventory: Cost added during Period Total Cost to account for 5,14,000 2,14,000 7,28,000 7,74,880 4,68,720 12,43,600 2,67,200 2,60,400 Divided by Equivalent Units Cost per Equivalent Unit $2.9 $1.8 $4.7
