Upton Knitters Manufactures Sweaters and Uses an Operation-Costing System

question 72

Essay

Upton Knitters manufactures sweaters and uses an operation-costing system. All sweaters are processed through Department no. 1, with subsequent processing taking place in Department no. 2 or Department no. 3, depending on the type of fabric used. Twenty thousand sweaters were produced during the year; there was no beginning or ending work in process. Sixty percent of the goods were sent to Department no. 2 for manufacturing.
Conversion cost incurred in the three departments totaled $504,000, subdivided as follows: Department no. 1, $360,000; Department no. 2, $60,000; and Department no. 3, $84,000.
Data pertaining to two representative orders, nos. 545 and 567, were:

Required:
A. Explain the nature of operation costing.
B. Determine the cost of order nos. 545 and 567.

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Definitions:

Family Environment

The social and emotional atmosphere in which a person is raised, including family dynamics, relationships, and cultural practices.

Behavioural Genetics

The academic discipline that investigates the impact of genetics and environmental factors on behavioral patterns.

Biological Perspective

An approach in psychology that examines behavioral and mental processes through the lens of biological processes, including genetics, neuroanatomy, and physiology.

Nurture Perspective

The viewpoint that environmental factors such as education, culture, and personal experiences play a crucial role in an individual's development.