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Hobart Beverage Company uses the weighted-average method in its process costing system. Materials are included at the start of the production process but conversion costs are uniformly applied throughout the production process. The following data about the Packaging Department were taken from the company's accounting records:
Cost data are summarized below:
WIP 1 January 2016
Cost per equivalent unit
Direct Materials :"$ 34,900
Materials : $2.45
Conversion costs : $ 41,500
Conversion :$3.15
1:Compute (a) the cost of WIP Inventory as of 31 January 2016 and (b) the cost of units completed and transferred out during the month.
2 What is the cost of goods sold by taking the unit cost data from the answers to requirement 3 above?
3. Assuming conversion cost consists 40% of labour costs and that manufacturing overhead cost is 60% fixed cost, calculate how many units ABC Company must sell to breakeven during January. Show all necessary formula and computations.
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