Product Costing and Conversion Cost
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PROBLEM 2
XXXX Company manufactures a variety of glass windows in its xx plant. In department 1, clear glass sheets are produced, and some of these sheets are sold as finished goods. Other sheets made in department 1 have metallic oxides added in department 2 to form colored glass sheet. Some of these colored sheets are sold; others are moved to department 3 for etching and then are sold. The company uses operation costing.
XXXX Company's production costs applied to products in May are given in the following table. There wa no beginning or ending inventory of work in process for may.
Cost category dept 1 dept2 dept 3
Direct material $450,000 $72,000 0
Direct labor 38,000 22,000 38,000
Manufacturing overhead 230,000 68,000 73,750
Products
Clear glass, sold after dept1 11,000 $247,500 o
Unetched colored glass, sold after dept.2 4,000 90,000 $32,000
Etched colored glass, sold after dept. 3 5,000 112,500 40,000
Each sheet of glass requires the same step within each operation.
Required:
a.Conversion cost per unit in dept 1
b. Conversion cost per unit in dept 2
c. The cost of a clear glass sheet.
d. The cost of an unetched colored glass sheet
e. The cost of an etched colored glass sheet
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Solution Summary
Excel file contains calculations of conversion cost of two departments and cost per unit of the products.
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