Spa produces two different spa products: Calm and Spring. The company uses three operations to manufacture the product
Posted: Wed Jul 06, 2022 6:24 am
Spa produces two different spa products: Calm andSpring.
The company uses three operations to manufacturethe products: mixing, blending, and packaging.
1.
Calculate the conversion cost rates for each department.
2.
Calm
Spring
May.
3.
May.
Calm
is produced in powder form in the mixing department, thentransferred to the blending department, and finally topackaging.
Spring undergoes no mixing; it is produced in liquid formin the blending department and then transferred to packaging. Inthe mixing department,
Lilly Spa applies conversion costs based on labor-hours.It takes 3 minutes to mix the ingredients for a container of Calm.In the blending department, conversion costs are appliedbased on the number of containers and in thepackaging department, on the basis of machine-hours. Ittakes 1.2 minutes of machine time to fill a container,regardless of the product.
Calm
Spring
Number of containers
12,000
11,000
Direct materials cost
$32,580
$32,670
The budgeted conversion costs for each department for
May are as follows:
Department
Allocation of Conversion Costs
Budgeted Conversion Cost
Mixing
Direct labor-hours
$660
Blending
Number of containers
$28,750
Packaging
Machine-hours
$1,840
The company uses three operations to manufacturethe products: mixing, blending, and packaging.
1.
Calculate the conversion cost rates for each department.
2.
Calm
Spring
May.
3.
May.
Calm
is produced in powder form in the mixing department, thentransferred to the blending department, and finally topackaging.
Spring undergoes no mixing; it is produced in liquid formin the blending department and then transferred to packaging. Inthe mixing department,
Lilly Spa applies conversion costs based on labor-hours.It takes 3 minutes to mix the ingredients for a container of Calm.In the blending department, conversion costs are appliedbased on the number of containers and in thepackaging department, on the basis of machine-hours. Ittakes 1.2 minutes of machine time to fill a container,regardless of the product.
Calm
Spring
Number of containers
12,000
11,000
Direct materials cost
$32,580
$32,670
The budgeted conversion costs for each department for
May are as follows:
Department
Allocation of Conversion Costs
Budgeted Conversion Cost
Mixing
Direct labor-hours
$660
Blending
Number of containers
$28,750
Packaging
Machine-hours
$1,840