Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

  1. Zachary Cola issued additional common stock for $54,000 cash.
  2. The company purchased raw materials and production supplies for $27,650 and $600, respectively, in cash.
  3. 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.
  4. 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.
  5. The predetermined overhead rate was $1.50 per direct labor hour.
  6. Actual overhead costs other than indirect materials and indirect labor for the year amounted to $800, which was paid in cash.
  7. The mixing department completed 600,000 units of Sweet Spring. The remaining inventory was 30 percent complete.
  8. The completed soft drink was transferred to the bottling department.
  9. The ending balance in the Production Supplies account was $550.

Required

  1. Determine the number of equivalent units of production. (Round "Cost per equivalent unit" answer to 2 decimal places.)
  2. Determine the product cost per equivalent unit. (Round "Cost per equivalent unit" answer to 2 decimal places.)
  3. 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.)
  4. 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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information For Business Decisions

Authors: Loren A Nikolai, Billie Cunningham, John D Bazley

3rd Edition

1111066884, 9781111066888

More Books

Students also viewed these Accounting questions

Question

What might cause a firm to face capital constraints?

Answered: 1 week ago

Question

What do you like to do in your spare time?

Answered: 1 week ago

Question

5. Give some examples of hidden knowledge.

Answered: 1 week ago