The Farad Old-Fashioned Soda Company (Farad) makes a line of old-fashioned sodas for sale in grocery...
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The Farad Old-Fashioned Soda Company (Farad) makes a line of old-fashioned sodas for sale in grocery stores. The Tonic Water flavour goes through the following process: All the raw materials except for the quinine and the carbonated water are mixed in the Mixing department to create the flavouring syrup. The syrup then goes to the Carbonation department, where the carbonated water is added. At the end of this process, the quinine is added. Then, the product moves to the Canning department, where it is canned and boxed. Each box contains 24 cans, and each can contains 500 millilitres. On June 1, 2,480,000 litres were in work-in-process (WIP) in the Mixing department. These were 30% complete as to conversion costs; 100% of raw materials were added at the beginning of the process in this department. On June 30, 2,200,000 litres were in WIP. During June, 11,000,000 litres were started into the process. A normal spoilage rate for the Mixing department is 0.1% of good units transferred to Carbonation. At the end of the month, there were 12,000 litres of spoiled product. The ending WIP was 60% complete as to conversion costs. When the product is 50% complete as to conversion costs, it is tested for quality to determine the spoilage. Farad uses the first in, first out (FIFO) method of process costing. Costs for the month for the Mixing department are as follows: In opening WIP: Raw material Conversion costs $17,240 $125,600 Costs added during the month: Raw material Conversion costs $276,785 $1,236,544 Required: Produce the process cost report for the month of June for the Mixing department for Farad. The Farad Old-Fashioned Soda Company (Farad) makes a line of old-fashioned sodas for sale in grocery stores. The Tonic Water flavour goes through the following process: All the raw materials except for the quinine and the carbonated water are mixed in the Mixing department to create the flavouring syrup. The syrup then goes to the Carbonation department, where the carbonated water is added. At the end of this process, the quinine is added. Then, the product moves to the Canning department, where it is canned and boxed. Each box contains 24 cans, and each can contains 500 millilitres. On June 1, 2,480,000 litres were in work-in-process (WIP) in the Mixing department. These were 30% complete as to conversion costs; 100% of raw materials were added at the beginning of the process in this department. On June 30, 2,200,000 litres were in WIP. During June, 11,000,000 litres were started into the process. A normal spoilage rate for the Mixing department is 0.1% of good units transferred to Carbonation. At the end of the month, there were 12,000 litres of spoiled product. The ending WIP was 60% complete as to conversion costs. When the product is 50% complete as to conversion costs, it is tested for quality to determine the spoilage. Farad uses the first in, first out (FIFO) method of process costing. Costs for the month for the Mixing department are as follows: In opening WIP: Raw material Conversion costs $17,240 $125,600 Costs added during the month: Raw material Conversion costs $276,785 $1,236,544 Required: Produce the process cost report for the month of June for the Mixing department for Farad.
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Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
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