Question
Problem 4 Equivalent Units Weighted-Average Method - Organic Juices, Inc. has developed a fruit crushing and pulverizing process. The following data relate to the crushing
Problem 4 Equivalent Units Weighted-Average Method-
Organic Juices, Inc. has developed a fruit crushing and pulverizing process.
The following data relate to the crushing process for November (note: production costs include the cost of materials and conversion costs for the department): | ||
| Pounds of fruit | Production costs |
Beginning work in process (45% complete) | 20,000 | $112,800 |
Current period production (units started) | 110,000 | 825,789 |
Ending work in process (53% complete) | 35,000 |
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Required: Calculate how many equivalent units were produced in November?
Problem 5 Cash Disbursements
Dan Jones is CFO for a newly formed manufacturing company. Below is the anticipated monthly production for the first six months of operation. Dan is interested in learning which of the first six months will require cash outlays of more than $40,000 toward the purchase of materials. Each unit requires 10 pounds of material at $6 per pound. All material is purchased in the month prior to its expected use. Purchases are paid for 15% in the month of purchase, 40% in the month following the month of purchase, and 45% in the second month following the month of purchase. Which months will require cash outlays in excess of the $40,000 amount? Does the production in any given month necessarily correspond to the cash flow for that same month? What are the business implications of your observation? | |||||||
| UNITS Purchasing Activity (Month prior to production) | Total Pounds | Total materials cost | Paid in Month | Paid in Month Relating to Prior Month | Paid in Month Relating to Two Months Prior | Total |
January | 600 |
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February | 800 |
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March | 900 |
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April | 400 |
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May | 500 |
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June | 550 |
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Total |
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