Ring Company Produces Two Types of Product: Small and Large

question 15

Multiple Choice

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

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

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Definitions:

Bowman Capsule

A double-layered structure surrounding the glomerulus of each nephron in the kidneys, involved in filtration of blood to form urine.

Urine Flow

The process of elimination of liquid waste from the body through the kidneys, ureters, bladder, and urethra.

Ureter

A pair of tubes that carry urine from the kidneys to the bladder in the urinary tract system.

Renal Pelvis

The central part of the kidney where urine collects before moving into the ureter.