Problem 6.38
Weighted Average Method, Two-Department Analysis, Change in Output Measure
Healthway uses a process-costing system to compute the unit costs of the minerals that it produces. It has three
departments: Mixing, Tableting, and Bottling. In Mixing, at the beginning of the process all materials are added and
the ingredients for the minerals are measured, sifted, and blended together. The mix is transferred out in gallon
containers. The Tableting Department takes the powdered mix and places it in capsules. One gallon of powdered mix
converts to 1,600 capsules. After the capsules are filled and polished, they are transferred to Bottling where they are
placed in bottles, which are then affixed with a safety seal and a lid and labeled. Each bottle receives 50 capsules.
During July, the following results are available for the first two departments (direct materials are added at the
beginning in both departments): Overhead in both departments is applied as a percentage of direct labor costs. In the Mixing Department, overhead is
200 percent of direct labor. In the Tableting Department, the overhead rate is 150 percent of direct labor. 1. Prepare a production report for the Mixing Department using the weighted average method. Follow the five
steps outlined in the chapter. If required, round your cost per equivalent unit answers to three decimal places
and use the rounded answers in subsequent computations. Round all other calculations and final answers to
the nearest dollar. 2. Prepare a production report for the Tableting Department. Materials are added at the beginning of the
process. Follow the five steps outlined in the chapter. If required, round your cost per equivalent unit
answers to four decimal places and use the rounded answers in subsequent computations. Round all other
calculations and final answers to the nearest dollar.