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Nike Company produces an artificial cherry flavoring that passes through two production processes. Nike uses the weighted-average method to account for units and costs. Data

Nike Company produces an artificial cherry flavoring that passes through two production processes. Nike uses the weighted-average method to account for units and costs. Data for June for process 1 follow:

% Completion
Units Materials Conversion
WIP inventory, Jun 1 70,000 80% 40%
WIP inventory, Jun 30 40,000 60% 35%


Materials cost in WIP, Jun 1 $ 62,260
Conversion cost in WIP, Jun 1 $ 19,620
Units started into production 310,000
Materials cost added during Jun $ 425,500
Conversion cost added during Jun $ 256,500

Question 1. What are the equivalent units for Jun for process 1?

Question 2. Compute the costs per equivalent unit for Jun process 1.

Questiion 3. Determine the total cost of ending WIP inventory in Jun.

Question 4. Determine total cost of units transferred to process 2 in Jun.

Nestle Company makes rubber cement. Data for Nestle's Mixing department is given below. Assume Nestle uses the weighted-average method in its process costing system.

% Complete
Units Materials Conversion
Ending WIP 45,000 60% 35%


Materials Conversion
Cost/EU $ 6.50 $ 9.50


Question 5. Determine the total cost assigned to the ending WIP inventory for the Mixing department.

GM Company manufactures two products - Product Y and Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z.

Activity Cost Pool Acitivity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours 300000 10000 MHs
Machine setups Number of setups 100000 400 setups
Production design Number of products 80000 2 products
General factory Direct labor-hours 450000 15000 DLHs


Activity Measure Product Y Product Z
Machining 6000 4000
Number of setups 150 250
Number of products 1 1
Direct labor-hours 9500 5500
Units Produced 20000 8000


Question 6. Using the ABC system, how much total manufacturing overhead cost will be assigned to Product Y and Product Z?

Question 7. Using the plantwide overhead rate, what percentage of the total overhead cost is assigned to Product Y? What percentage is assigned to Product Z?

Question 8. Using the ABC system, what percentage of each of the cost pools is assigned to Product Y?

Product Z?

Machining Product Y
Machine Setup Product Y
Product Design Product Y
General Factory Product Y
Machining Product Z
Machine Setup Product Z
Product Design Product Z
General Factory Product Z

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