Sunrise Vitamin Company manufactures three different types of vita-mins: vitamin A, vitamin B, and a multivitamin. The company uses four operations to manufacture the vitamins: mixing, tableting, encapsulating, and bottling. Vitamins A and B are produced in tablet form ( in the tableting department) and the multivitamin is produced in capsule form ( in the encapsulating department). Each bottle contains 200 vitamins, regardless of the product. Conversion costs are applied based on the number of bottles in the tableting and encapsulating depart-ments. Conversion costs are applied based on labor- hours in the mixing department. It takes 1 ½ minutes to mix the ingredients for a 200- unit bottle for each product. Conversion costs are applied based on machine-hours in the bottling department. It takes 0.3 minutes of machine time to fill a 200- unit bottle, regardless of the product. The budgeted number of bottles and expected direct material cost for each type of vitamin is as follows:

The budgeted conversion costs for each department for July are as follows:
Department Budgeted Conversion Cost
Mixing......... $ 8,000
Tableting ....... 22,800
Encapsulating .... 30,450
Bottling........ 1,000

  • CreatedJanuary 15, 2015
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