Question
Super Chemicals Ltd manufactures its signature dish-mashing liquid, Super Clean, in onelitre containers. Production takes place in two departments: Mixing and Packing. The manufacturing costs
Super Chemicals Ltd manufactures its signature dish-mashing liquid, Super Clean, in onelitre
containers. Production takes place in two departments: Mixing and Packing.
The manufacturing costs for each department for December 2019 were as follows.
Mixing Packing
Direct materials $ 74 000 $ 13 000
Direct labour 36 000 8 000
Manufacturing overhead 20 000 12 000
During December 2019, the company produced 140 000 litres of Super Clean mixture which
was packed into 140 000 containers.
Required:
(a) What is the cost per container for Super Clean dish-washing liquid? (4 marks)
(b) Prepare the journal entries to record the production costs for December 2019. Assume
that the costs of the two production departments are charged to separate work in
process inventory accounts. (10 marks)
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