Question
Taft Company manufactures two products: Solvent A and Solvent X. Solvent A is a high-end product that requires more expensive materials than solvent X and
- Taft Company manufactures two products: Solvent A and Solvent X. Solvent A is a high-end product that requires more expensive materials than solvent X and is produced at smaller volume. The two products go through the two production departments in essentially the same conversion processes. There is no work-in-process inventory for either product.
Taft uses an operation costing system that assigns materials cost to the specific product for which the underlying materials are used and assigns conversion costs to all products evenly as each product undergoes the same process in each production department.
The production and cost data are available for July:
|
|
| Solvent A | Solvent X |
|
| Total | 5,000 Units | 7,000 Units |
| Materials: |
|
|
|
| Mixing | $290,000 | $140,000 | $150,000 |
| Packaging | 100,000 | 45,000 | 55,000 |
| Total materials cost | $390,000 | $185,000 | $205,000 |
| Conversion: |
|
|
|
| Mixing | $144,000 |
|
|
| Packaging | 180,000 |
|
|
| Total conversion cost | $324,000 |
|
|
|
|
|
|
|
Required:
Determine the unit cost for Solvent A and Solvent X
.
|
| Total | Solvent A | Solvent X |
|
|
| 5.000 units | 7,000 units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing
Authors: Thomas D. Hubbard, J. R. Johnson, Steve Johnson, Joel D. Hubbard
6th Edition
0873932609, 9780873932608
