Question:
1.) Cold Spring produces premium bottle water. Cold Spring purchases artesian water, stores the water in large tanks, and then runs the water through 2 processes; filtration and bottling. During February, the filtration process incurred the following costs in processing 190,000 liters:
Wages of workers operating the filtration equipment- $21,950
Manufacturing overhead allocated to filtration- $25,050
Water-$ 150,000
Cold Spring had no beginning inventory in the filtration department in february.
Requirements:
R1)Compute the February Conversion costs in the filtration department.
R2)The filtration department completely processed 190,000 liters in February. What was the filtration cost per liter?
2.) Refer to Question 1. At Cold Spring, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. Now assume that in February, 125,000 liters were completed and transferred out of the filtration department into the bottling department. The 65,000 units remaining in filtration's ending work in process inventory were 80% of the way through the filtration process. Recall that Cold Spring had no beginning inventories.
Requirements:
R1) draw a timeline for the filtration process
R2) compute the equivalent units of direct materials and conversion costs for the filtration department