You have recently been appointed as the cost accountant for Silky Hair Co. Ltd., a manufacturer of hair shampoo. Your first task is toclear up the production records of the mixing department for November 2022.You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previousdepartment use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point inprocessing.You also find out that the beginning inventory for the month of November was 4,000 units with the following costs:Transferred-in costsDirect materialsConversion costs$16,0003,60024,000In addition, during November, 16,000 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,000 unitsthat were 60% complete. During the month, direct materials of $26,400 were added and 8,500 hours of direct labour were used at awage rate of $12 per hour.The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 120,000 hours and acost function derived from the following overhead equation: Y = 60,000+ 2X, where Y is the total overhead costs and X is the directlabour hours.Using weighted-average process costing techniques, calculate the following for the mixing department for November 2022:Unit cost $The unit cost of items transferred to finished goods (Round answer to 4 decimal places, e.g.52.7525.)

The weighted average costing method calculates unit costs by combining the costs of beginning…

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The unit cost of items transferred to finished goods (Round answer to 4 decimal places, e.g. 52.7525.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

You have recently been appointed as the cost accountant for Silky Hair Co. Ltd., a manufacturer of hair shampoo. Your first task is to
clear up the production records of the mixing department for November 2022.
You learn that the mixing department is the last stage of the shampoo production process. Units transferred from the previous
department use direct labour and overhead inputs evenly in mixing. A secret ingredient is also added to each unit at the 40% point in
processing.
You also find out that the beginning inventory for the month of November was 4,000 units with the following costs:
Transferred-in costs
Direct materials
Conversion costs
$16,000
3,600
24,000
In addition, during November, 16,000 units were transferred to mixing at a $4 unit cost. The ending inventory consisted of 5,000 units
that were 60% complete. During the month, direct materials of $26,400 were added and 8,500 hours of direct labour were used at a
wage rate of $12 per hour.
The overhead rate for 2022, applied on a basis of direct labour hours, was based on a predicted annual usage of 120,000 hours and a
cost function derived from the following overhead equation: Y = 60,000+ 2X, where Y is the total overhead costs and X is the direct
labour hours.
Using weighted-average process costing techniques, calculate the following for the mixing department for November 2022:
Unit cost $
The unit cost of items transferred to finished goods (Round answer to 4 decimal places, e.g.
52.7525.)

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