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Russia Spring produces premium bottled water. Russia Spring purchases artesian water, stores the water in large tanks, and then runs the water through two processes:

Russia Spring produces premium bottled water. Russia Spring purchases artesian water, stores the water in large tanks, and then runs the water through two processes: filtration and bottling. At Russia Spring, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. During February, the filtration process incurred the following costs in processing 150,000 liters:
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Now assume that in February, 125,000 liters were completed and transferred out of the Filtration Department and into the Bottling Department.
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Compute the equivalent units of production for direct materials and conversion costs for the Filtration Department.
\table[[\table[[Russia Spring],[Production Cost Report - Filtration Department (Partial)],[Month Ended February 28]]],[,\table[[Physical],[Units]],Equivalent Units],[UNITS,\table[[Direct],[Materials]],\table[[Conversion],[Costs]]],[Units accounted for:],[Completed and transferred out],[Ending work-in-process],[Total units accounted for,,,]]
Abrey, Inc. has the following cost data for Product x, and unit product cost using variable costing when production is 1,000 units, 1,200 units, and 6,000 units.
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View the unit product cost data.
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Data
Begin by selecting the labels and computing the contribution margin for scenario a . and then compute the contribution margin for scenario b . and c .
\table[[Variable costing,a.],[Net Sales Revenue,],[Total Variable Costs,],[Contribution Margin,]]
\table[[Direct materials,$38 per unit],[Direct labor,60 per unit],[Variable manufacturing overhead,11 per unit],[Fixed manufacturing overhead,6,000 per year]]
Unit product cost data
Requirements
\table[[,1,000 units,1,200 units,6,000 units],[\table[[Direct materials],[Direct labor],[Variable manufacturing overhead]],$,38$,38$,38],[,60,60,60],[,11.,11,11],[$,109$,109$,109]]
Product X sells for $163 per unit. Assume no beginning inventories. Calculate the contribution margin using variable costing when Abrey, Inc.:
a. Produces and sells 1,000 units.
b. Produces 1,200 units and sells 1,000 units.
c. Produces 6,000 units and sells 1,000 units.
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