BUS 207 Assignment 4, Chapter 18, Problem

Olney Health Bars Corporation makes a delicious chocolate fruit/nut bar enjoyed at Saxbys Coffee stores. This product passes through three production processes: mixing the ingredients, forming the product, and packaging. The company uses process costing.

The following are data concerning the costs incurred in each process during February, along with the number of units produced:

	Mixing	Forming	Packaging
Direct materials	$ 35,000	$0	$3,800
Direct labor	$50,000	$40,000	$14,000
Manufacturing overhead	$45,000	$50,000	$7,000
Output	20,000 lbs.	40,000 dozen	4,000 cases

To ensure safety of the product, all Olney Health Bars are mixed, formed, and packaged on the same day. Therefore, the company has no inventory in process at the end of a business day.

Required:

a. Summarize the total costs of the Mixing Department and the cost per pound.

b. Summarize the total costs of the Forming Department and the cost per dozen.

c. Summarize the total costs of the Packaging Department and the cost per case.

d. Prepare a summary of total costs incurred to produce the 4,000 cases of Olney Health Bars and the cost for each Health Bar.

e. In which General Ledger account(s) will the cost of the Olney Health Bars appear at the end of the business day?