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WholesomeWholesome Dairy produces an organic butter that is sold by the pound. The production of the butter begins in the Churning Department. Data for the

WholesomeWholesome

Dairy produces an organic butter that is sold by the pound. The production of the butter begins in the Churning Department.

Data for the Churning Department for

JanuaryJanuary

follows:

Units in beginning Work in Process (WIP) inventory

90,000 units

Units started during the month (all direct materials, including cream

and salt, are added at the beginning of the churning process)

1,900,000 units

Units in ending Work in Process (WIP) inventory (50% of the way

through the process)

140,000 units

Cost information is as follows:

WIP - Churning Department balance as of January 1:

Direct material cost included in beginning WIP balance

519,100

Conversion cost included in beginning WIP balance

249,800

Beginning balance, WIP, January 1

$768,900

Manufacturing costs incurred during January:

Direct materials used

$1,650,000

Direct labor

15,000

Manufacturing overhead

580,000

Total manufacturing costs entered into production during January

$2,245,000

1.

Prepare a production cost report for

JanuaryJanuary

for the Churning Department.

2.

How much did it cost to make one pound of butter in the Churning Department?

3.

How much did it cost to make a partially completed pound of butter in the Churning Department? Does this make sense? Why or why not?

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