Nonuniform Inputs, Multiple Departments Benson Pharmaceuticals uses a process-costing system to compute the unit costs of the
Question:
Overhead in both departments is applied as a percentage of direct labor costs. In the mixing department, overhead is 200 percent of direct labor. In the encapsulating department, the over-head rate is 150 percent of direct labor.
Required:
1. Prepare a production report for the mixing department using the weighted average method. Follow the five steps outlined in the chapter. (Round to two decimal places for the unit cost.)
2. Prepare a production report for the encapsulating department using the weighted average method. Follow the five steps outlined in the chapter. (Round to four decimal places for the unit cost.)
3. Explain why the weighted average method is easier to use than FIFO. Explain when weighted average will give about the same results as FIFO.
Step by Step Answer:
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen