Question
Supreme Manufacturing was founded over 35 years ago in East Brunswick, NJ. Supremes Muy Refresc de Tropical line of Horchata, Tamarindo, and Jamaica drinks are
Supreme Manufacturing was founded over 35 years ago in East Brunswick, NJ. Supreme’s Muy Refrescó de Tropical line of Horchata, Tamarindo, and Jamaica drinks are lovingly re-created from Latino recipes handed down through the generations. The Muy Refrescó de Tropical line uses only natural cinnamon, vanilla, rice, tamarind root, and hibiscus flower, and is sweetened only with all-natural cane sugar. A long-time cultural favorite, the popularity of Horchata, Tamarindo, and Jamaicas has exploded in recent years. This is due to both the general market’s exposure to aguas frescas, and the rapid growth of the Latino market’s population and buying power. The U.S. Latino population is currently growing faster than the general market with growth of 43% over the last 10 years—or 16.3% of the entire U.S. population. Along with this growth, a new awareness of the potential health dangers of processed, sugary foods has emerged across all markets. Muy Refresco’ de Tropical’s natural ingredients and real cane sugar mean they’re free of fat, cholesterol, caffeine, lactose, and gluten. Supreme’s Horchata, Tamarindo, and Jamaica: a naturally delicious, healthier alternative to today’s sugary sodas.
Each flavor is available in 64 fl. oz. bottles and sold for $12 each. The first stage in the production process is carried out in the Mixing Department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the FIFO method in its process costing system. Production data for the month of April appears below:
Production data:
Units in process, April 1 (materials 90% complete;
conversion 80% complete). . . . . . . . . . . . . . . . . . . . . . 30,000
Units started into production. . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
Units in process, April 30 (materials 75% complete;
conversion 75% complete) . . . . . . . . . . . . . . . . . . . . . . 40,000
Cost data:
Work in process inventory, April 1:
Materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $67,800
Conversion cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,200
Cost added during the month:
Materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $579,000
Conversion cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $248,900
REQUIRED:
- Prepare a FIFO production report for the Mixing Department for Supreme Manufacturing for the month ended April 30, 2021.
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