Compute the cost per equivalent unit for each cost item

Reference no: EM131797185

Problem: PURDY CORPORATION

PURDY CORPORATION produces canned chicken a la king. The chicken a la king passes through three departments;

(1) Mixing,

(2) Retort (sterilization), and

(3) Packing. In the Mixing Department, chicken and cream are added at the beginning of the process, the mixture is partly cooked, and chopped green peppers and mushrooms are added at the end of the process. Conversion costs are added evenly throughout the mixing process.

February data from the Mixing Department are as follows:

Gallons

Beginning work in process inventory 1,000 gallons

Started production 14,000 gallons

Completed and transferred out to Retort in February 10,000 gallons

Note: The ending inventory is 60% complete as to mixing.

Costs

Beginning work in process inventory

Chicken $3,000

Cream $1,500

Green peppers and mushrooms $7,000

Direct labor $12,000

Manufacturing overhead $8,000

Costs added during February

Chicken $23,250

Cream $12,000

Green peppers and mushrooms $47,000

Direct labor $92,000

Manufacturing overhead $99,250

REQUIRED: 1. Compute the cost per equivalent unit for each cost item in the Mixing Department. If necessary, round to the nearest cent.

2. Compute the total costs for the units:

a. Completed and transferred out to the Retort Department.

b. In the Mixing Department's ending work in process inventory.

3. Provide the journal entry for the completed and transferred out unit to the Retort Department.

Reference no: EM131797185

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