Question

Viking Beer is a microbrewery that produces one type of beer. The production level is 18,000 gallons per month, which is bottled in 192,000 twelve-ounce bottles. The beer is brewed in batches of 3,600 gallons, which is the capacity of the fermenting tanks. Each batch requires six days of processing, during which it passes through six separate production processes.
Viking uses process costing. All manufacturing costs incurred during the month are assigned to the 192,000 bottles produced; no valuation is assigned to the 3,600 gallons currently sitting in the fermenting tanks.
Viking has hired Matt Brown, a recent college graduate, as a cost analyst. After learning about the company’s cost accounting system, Brown sent the following memo to Viking’s controller:

Instructions
As Viking’s controller, draft a memo responding to Brown’s suggestions.



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  • CreatedApril 17, 2014
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