Compute the July balances of the factory overhead accounts. Bavarian Chocolate C

Question

Compute the July balances of the factory overhead accounts. Bavarian Chocolate Company processes chocolate into candy bars The process, begins by placing direct materials (raw chocolate, milk, and sugar) into the Blending Department. All materials are placed into production at the beginning of the blending process. After blending, the milk chocolate is then transferred to the molding department where the milk chocolate is formed into candy bars. The following is a partial work in process account of the blending department at October 31, 2016:

Explanation / Answer

Closing stock = 2,300 + 26,000 - 25,700 = 2,600 units

Statement of Equivalent unit (FIFO Method)

Statement of cost per eqvivalent unit

Statement of cost

Account Work in process

2) Cost Comparison

Opening cost of material = 38,925 / 2300 = 16.92

During the year material = 16.50

There is decrease in material cost by 0.42

Opening conversion Cost = 7,443 / ( 2,300 X 60%) = 5.40

Closing Conversin Cost = 6.00

There is increase in conversion cost by 0.60

Particulars Units %age Material %age Labor + Overhead Opening 2,300 0 0 2/5 or 40% 920 Units introduced & completed 23,400 100% 23,400 100% 23,400 Closing Stock 2,600 100% 2,600 1/5 or 20% 520 Total 28,300 26,000 24,840

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