Baoding Mass-Produces a Single Product Using Three Sequential Processing Departments

question 71

Essay

Baoding mass-produces a single product using three sequential processing departments: Machining, Assembly, and Packaging. The following transactions occurred during February:
Note: No direct materials were used by the Baking Department.
Required:
A. Post each of these transactions to the company's inventory T-accounts provided below.
B. Determine the balance at month end in each of the T-accounts.
C. Assume that 1,075,000 units were completed and transferred out of the Packaging Department during the month. What was the cost per unit of making each unit?

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Definitions:

Facility Cost

Expenses related to the physical buildings, utilities, and equipment required to operate a business.

Transportation Cost

Expenses incurred in moving goods from one location to another, including freight charges, fuel costs, and warehousing.

Inventory Cost

The total cost associated with holding or storing inventory, including warehousing, insurance, depreciation, obsolescence, and opportunity costs.

Processing Cost

The expenses incurred during the transformation of raw materials into finished products, including labor, materials, and overhead.