Figure 6-21 Ring Company produces two types of product: Small and Large.Two work orders for two batches of the products are shown below, along with some additional cost information:
In the Mixing Department, conversion costs are applied on the basis of direct labor hours.Budgeted conversion costs for the department for the year were $50,000 for labor and $125,000 for overhead.Budgeted direct labor hours were 2,500.It takes three minutes to mix the ingredients needed for each bottle.
Small (Work Order 10) and Large (Work Order 11) flow through the Mixing Department first, then through the Cooking and Bottling departments.
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Refer to Figure 6-21.What is Ring Company's unit cost of Small?

Question

Figure 6-21 Ring Company produces two types of product: Small and Large.Two work orders for two batches of the products are shown below, along with some additional cost information:
 In the Mixing Department, conversion costs are applied on the basis of direct labor hours.Budgeted conversion costs for the department for the year were $50,000 for labor and $125,000 for overhead.Budgeted direct labor hours were 2,500.It takes three minutes to mix the ingredients needed for each bottle.
Small (Work Order 10) and Large (Work Order 11) flow through the Mixing Department first, then through the Cooking and Bottling departments.
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Refer to Figure 6-21.What is Ring Company's unit cost of Small?

Quizplus · Accepted Answer

The unit cost of Small is calculated by dividing the total cost by the number of units produced. The figure likely provides the necessary data to determine this, and $16.90 is the correct unit cost based on the given options.

Figure 6-21 Ring Company Produces Two Types of Product: Small