Weighted Average Method, Two-Department Analysis, Change in Output Measure

Healthway uses a process-costing system to compute the unit costs of the minerals that it produces. It has three departments: Mixing, Tableting, and Bottling. In Mixing, at the beginning of the process all materials are added and the ingredients for the minerals are measured, sifted, and blended together. The mix is transferred out in gallon containers. The Tableting Department takes the powdered mix and places it in capsules. One gallon of powdered mix converts to 1,600 capsules. After the capsules are filled and polished, they are transferred to Bottling where they are placed in bottles, which are then affixed with a safety seal and a lid and labeled. Each bottle receives 50 capsules.

During July, the following results are available for the first two departments (direct materials are added at the beginning in both departments):

Overhead in both departments is applied as a percentage of direct labor costs. In the Mixing Department, overhead is 200 percent of direct labor. In the Tableting Department, the overhead rate is 150 percent of direct labor.

Required:

1. Prepare a production report for the Mixing Department using the weighted average method. Follow the five steps outlined in the chapter. If required, round your cost per equivalent unit answers to three decimal places and use them in subsequent computations. Round all other calculations and final answers to the nearest dollar.

2. Prepare a production report for the Tableting Department. Materials are added at the beginning of the process. Follow the five steps outlined in the chapter. If required, round your cost per equivalent unit answers to four decimal places and use them in subsequent computations. Round all other calculations and final answers to the nearest dollar.

Mixing Tableting Beginning inventories: 5 gallons 4,000 capsules Physical units Costs: Direct materials $32 $120 Direct labor 128 20 Overhead Transferred in 140 Current production: Transferred out 125 gallons 198,000 capsules Ending inventory 6 6000 Costs: $3,144 Direct materials $1,584 Transferred in Direct labor 4,096 1,944 Overhead Percentage of completion: Beginning inventory 40 % 50 Ending inventory 50 40 Healthway Mixing Department Production Report for July 20XX Unit Information Units to account for: Units, beginning work in process 5 126 Units started 131 Total units to account for Units accounted for: Equivalent Units Conversion Physical Flow Direct Materials Costs Units completed 125 125 125 6V 6 3 Units, ending work in process 131 131 128 Total units accounted for Cost Information Costs to account for: Conversion Direct Materials Total Costs Costs in beginning work in process 120 384 504 12,288 3,144 15,432 Costs added by department 3,264 15,936 12,672 Total costs to account for 130 X 99 $ X 25 Cost per equivalent unit Costs accounted for Ending worK IN Total Transferred Out Process 15,490 S Goods transferred out 15,490 Ending work in process: Direct materials 149 149 297 297 Conversion costs 15,490 446 15,936 Total costs accounted for Tableting Department Production Report for July 20XX Unit Information Units to account for: 4,000 Units, beginning work in process 200,000 Units started 204,000 Total units to account for Units accounted for: Equivalent Units Transferred In Direct Materials Physical Flow Conversion Costs 198,000 198,000 198,000 198,000 Units completed 2,400 6,000 6,000 6,000 Units, ending work in process 204,000 204,000 204,000 200,400 Total units accounted for Cost Information Costs to account for: Transferred In Direct Materials Conversion Costs Total Costs in beginning work in process $ 32 $ 50 $ 84 X 2 X $ X 15,494 Costs added by department Total costs to account for Cost per equivalent unit Costs accounted for Endina Morle in Ending Work in Process Transferred Out Total Goods transferred out Ending work in process: Transferred in Direct materials Conversion costs Total costs accounted for Mixing Tableting Beginning inventories: 5 gallons 4,000 capsules Physical units Costs: Direct materials $32 $120 Direct labor 128 20 Overhead Transferred in 140 Current production: Transferred out 125 gallons 198,000 capsules Ending inventory 6 6000 Costs: $3,144 Direct materials $1,584 Transferred in Direct labor 4,096 1,944 Overhead Percentage of completion: Beginning inventory 40 % 50 Ending inventory 50 40 Healthway Mixing Department Production Report for July 20XX Unit Information Units to account for: Units, beginning work in process 5 126 Units started 131 Total units to account for Units accounted for: Equivalent Units Conversion Physical Flow Direct Materials Costs Units completed 125 125 125 6V 6 3 Units, ending work in process 131 131 128 Total units accounted for Cost Information Costs to account for: Conversion Direct Materials Total Costs Costs in beginning work in process 120 384 504 12,288 3,144 15,432 Costs added by department 3,264 15,936 12,672 Total costs to account for 130 X 99 $ X 25 Cost per equivalent unit Costs accounted for Ending worK IN Total Transferred Out Process 15,490 S Goods transferred out 15,490 Ending work in process: Direct materials 149 149 297 297 Conversion costs 15,490 446 15,936 Total costs accounted for Tableting Department Production Report for July 20XX Unit Information Units to account for: 4,000 Units, beginning work in process 200,000 Units started 204,000 Total units to account for Units accounted for: Equivalent Units Transferred In Direct Materials Physical Flow Conversion Costs 198,000 198,000 198,000 198,000 Units completed 2,400 6,000 6,000 6,000 Units, ending work in process 204,000 204,000 204,000 200,400 Total units accounted for Cost Information Costs to account for: Transferred In Direct Materials Conversion Costs Total Costs in beginning work in process $ 32 $ 50 $ 84 X 2 X $ X 15,494 Costs added by department Total costs to account for Cost per equivalent unit Costs accounted for Endina Morle in Ending Work in Process Transferred Out Total Goods transferred out Ending work in process: Transferred in Direct materials Conversion costs Total costs accounted for