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2 January, 10:46

Cold Spring produces premium bottle water. Cold Spring purchases artesian water, stores the water in large tanks, and then runs the water through 2 processess; filtration and bottling. During February, the filtration proces incurred the following costs inprocessing 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.Â

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?

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Answers (1)
  1. 2 January, 11:00
    0
    R1. $47,000

    R2. $1.04 per liter

    Explanation:

    Given that,

    Wages of workers operating the filtration equipment = $21,950

    Manufacturing overhead allocated to filtration = $25,050

    Water = $ 150,000

    R1. February Conversion costs in the filtration department:

    = Direct labor costs + Manufacturing overhead

    = $21,950 + $25,050

    = $47,000

    R2. Filtration cost per liter:

    = Total cost incurred : Total units processed

    = ($21,950 + $25,050 + $ 150,000) : 190,000

    = $197,000 : 190,000

    = $1.036 or $1.04 per liter
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