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Zachary Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Zachary's beginning balances and data pertinent to
Zachary Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Zachary's beginning balances and data pertinent to the mixing department's activities for 2018 follow:
Accounts Beginning Balances
Cash $ 47,000
Raw materials inventory14,000
Production supplies100
Work in process inventory (430,000 units)51,600
Common stock $ 109,100
- Zachary Cola issued additional common stock for $54,000 cash.
- The company purchased raw materials and production supplies for $27,650 and $600, respectively, in cash.
- The company issued $29,560 of raw materials to the mixing department for the production of 600,000 units of Sweet Spring that were started in 2018. A unit of soft drink is the amount needed to fill a bottle.
- The mixing department used 2,100 hours of labor during 2018, consisting of 1,900 hours for direct labor and 200 hours for indirect labor. The average wage was $9.50 per hour. All wages were paid in 2018 in cash.
- The predetermined overhead rate was $1.50 per direct labor hour.
- Actual overhead costs other than indirect materials and indirect labor for the year amounted to $800, which was paid in cash.
- The mixing department completed 600,000 units of Sweet Spring. The remaining inventory was 30 percent complete.
- The completed soft drink was transferred to the bottling department.
- The ending balance in the Production Supplies account was $550.
Required
- Determine the number of equivalent units of production. (Round "Cost per equivalent unit" answer to 2 decimal places.)
- Determine the product cost per equivalent unit. (Round "Cost per equivalent unit" answer to 2 decimal places.)
- Calculate the total cost allocated between the ending work in process inventory and units transferred to the bottling department. (Round intermediate calculations to 2 decimal places.)
- Record the transactions in T-accounts.(The cash expenditures in events No. 2 and No. 4 should be combined into a single amount in the cash account for each event. Round intermediate calculations to 2 decimal places.)
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