Question:

Prepare a cost of production report for september 20X8. The company uses weighted averages.

Problem:

Martha's Cookie Company produces cookies in two departments; mixing and finishing. In mixing, all ingredients except nuts are added at the start of production. In finishing, nuts is added and then the mixture is placed into containers. Adding the nuts to the basic cookie mixture increases the volume transferred in by the number of gallons of nuts added. Any spoilage that occurs is in the Finishing Department. Spoilage is detected just before the cookies are placed into containers or at the 98% completion point. All spoilage is abnormal.

Finishing Department

BWIP (100% nuts, 0% container, 30% CC) 5,000 gallons

Gallons transferred in 5,500

Gallons of nuts added 1,200

EWIP (100% nuts, 0% container, 60% CC) 1,700 gallons

Gallons transferred out 9,000

abnormal spoilage 1,000

BWIP Costs:

Transferred IN $ 9,700

Nuts 10,500

CC (Conv. Cost) 15,000

Current Costs:

Transferred in $ 12,400

Nuts 54,000

Containers 11,000

CC 98,000