P5-55B Five-step process: Materials added at different points

(Learning Objectives 1, 2, & 3)

Value World 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, then chopped green peppers and mushrooms are added at the end of the process. Conversion costs are added evenly throughout the mixing process.

November data from the Mixing Department are as follows:

Gallons Costs Beginning work in process inventory Started production..............................................
Completed and transferred out to Retort in November.........................................
Ending work in process inventory (55% of the way through the mixing process)....................
0 gallons 13,900 gallons 13,300 gallons 600 gallons Beginning work in process inventory Costs added during November:
Chicken............................................
Cream..............................................
Green peppers and mushrooms......
Direct labor ....................................
$ 0 10,990 4,300 3,990 11,900 Manufacturing overhead..................... 8,545 Total costs............................................ $39,725 Requirements 1. Draw a time line for the Mixing Department.
2. Use the time line to help you summarize the flow of physical units and compute the equivalent units. (Hint: Each direct material added at a different point in the production process requires its own equivalent-unit computation.)
3. Compute the cost per equivalent unit for each cost category.
4. Compute the total costs of the units (gallons):

a. Completed and transferred out to the Retort Department

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