Hannish Orchards,a juice manufacturer,uses a process that adds flavoring at the beginning of the process and vitamins and minerals 70% of the way through the process.Conversion costs are evenly distributed.Assume there are no beginning inventories.The company started making 10,000 gallons of the drink,and the 2,000 gallons left in ending WIP were 40% of the way through the process.
- Costs incurred during the period were:
$\begin{array}{|l|l|l|}
\hline \$ 9,500 & \text { for flavoring } \
\hline \$ 6,500 & \text { for vitamins/minerals } \
\hline \$ 4,800 & \text { for conversion costs } \
\hline
\end{array}$

The cost assigned to ending work in process would be closest to:

Question

Hannish Orchards,a juice manufacturer,uses a process that adds flavoring at the beginning of the process and vitamins and minerals 70% of the way through the process.Conversion costs are evenly distributed.Assume there are no beginning inventories.The company started making 10,000 gallons of the drink,and the 2,000 gallons left in ending WIP were 40% of the way through the process. 
-  Costs incurred during the period were:
$\begin{array}{|l|l|l|}
\hline \$ 9,500 & \text { for flavoring } \
\hline \$ 6,500 & \text { for vitamins/minerals } \
\hline \$ 4,800 & \text { for conversion costs } \
\hline
\end{array}$

The cost assigned to ending work in process would be closest to:

Quizplus · Accepted Answer

The ending WIP is 40% complete, so it includes 100% of flavoring costs, 0% of vitamins/minerals costs, and 40% of conversion costs. Calculate the cost for each component and sum them:  - Flavoring: $ \frac{2,000}{10,000} \times 9,500 = 1,900 $  - Vitamins/Minerals: $ 0 $ (since not yet added)  - Conversion: $ \frac{2,000}{10,000} \times 4,800 \times 0.4 = 384 $  Total cost = $ 1,900 + 0 + 384 = 2,284 $, closest to $2,336.

Hannish Orchards,a Juice Manufacturer,uses a Process That Adds Flavoring at the Beginning