Golden Ring Company Produces Two Types of Product: Large and Larger

question 105

Multiple Choice

Golden Ring Company produces two types of product: Large and Larger. Two work orders for two batches of the products are shown below, along with some additional cost information: $\begin{array} { l }&\text { Large } & \text { Larger } \\&\text { Work Order } 10 & \text { Work Order } 11\\\text {Direct materials (actual costs) }&\$45,000&\$75,000\\\text { Applied conversion costs:}\\\text {Mixing }&?&?\\\text { Cooking } & \$ 12,000 & \$ 12,000 \\\text { Bottling } & \$ 10,000 & \$ 15,000 \\\\\text { Batch size (bottles) } & 5,000 & 5,000\end{array}$
In the Mixing Department, conversion costs are applied on the basis of direct labor hours. Budgeted conversion costs for the department for the year were $50,000 for labor and $125,000 for overhead. Budgeted direct labor hours were 2,500. It takes three minutes to mix the ingredients needed for each bottle.
Large (Work Order 10) and Larger (Work Order 11) flow through the Mixing Department first, then through the Cooking and Bottling departments.
What is Golden Ring Company's unit cost of Large?

• A)$3.50
• B)$16.90
• C)$23.90
• D)$70.00

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Definitions:

Round Tubing

Hollow cylindrical materials, often made of metal or plastic, used in structural, fluid conveyance, or mechanical applications.

Structural Steel

A category of steel used for making construction materials in a variety of shapes, known for its high strength-to-weight ratio.

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The measure of the steepness or incline of a surface, typically defined as a ratio or a percentage.

Tapered Washers

Specialized washers with a taper used to create a level surface when attaching fasteners to surfaces that are not perpendicular to the fastener axis.