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Honey Butter, Inc. Process Costing

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Honey butter, Inc. Manufactures a product that goes through two departments prior to completion, the Mixing Department followed by the Packaging Department. The following information is available about work in the first department. The Mixing Department, during June.

Percent Completed
Units Materials Conversions
Work in Process, beginning 70,000 70% 40%
Started into production 460,000
Completed and Transferred out 450,000
Work in Process, ending 80,000 75% 25%
Materials Conversions
Work in Process, beginning 36550 13500
Cost added during June 391850 287300

1) Determine the equivalent units for June for the Mixing Department

2) Compute the costs per equivalent unit for June for the Mixing Department

3) Determine the toal cost of ending work in process inventory and the total cost of units transferred to the packing Department

4) Prepare a cost reconciliation report for the Mixing Department for June

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Solution Summary

Your tutorial is attached in Excel. Click in cells to see computations. This is a format that can now be used for other problems (just change amounts at the top and the worksheet will update the amounts). You can see that materials and conversion costs have to be handled separately and then combined. I assume the weighted average method as the problem did not specify weighted average or FIFO.

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Your tutorial is attached in Excel. Click in cells to see computations. This is a format that can ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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