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Helsinki Inc. produces premium bottled water. Helsinki purchases artesian water, stores the water in large tanks, and then runs the water through two processes:
- Filtration, where workers microfilter and ozonate the water
- Bottling, where workers bottle and package the filtered water
During December, the filtration process incurs the following costs in processing 200,000 liters:
Wages of workers operating the filtration equipment $11,100
Wages of workers operating ozonation equipment $12,850
Manufacturing
Water $120,000
QUESTIONS:
1.
Now, assume that the total costs of the filtration process listed in the previous chart yield 160,000 liters that are completely filtered and ozonated, while the remaining 40,000 liters are only partway through the process at the end of December. Is the cost per completely filtered and ozonated liter higher, lower, or the same as in question 2? Why?
At Helsinki, water is added at the beginning of the filtration process. Conversion costs are incurred evenly throughout the process, and in December, 160,000 liters have been completed and transferred out of the Filtration Department to the Bottling Department.
The 40,000 liters remaining in the Filtration Department's ending work in process inventory are 80% of the way through the filtration process. Assume no beginning inventories.
2.Complete Steps 3 and 4 of the
3.Prepare a schedule to complete step 5 of the process costing procedure to show the cost of the 160,000 liters completed and transferred out of the Filtration Department.
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