Calculating Conversion Costs and Unit Cost; Computing EUP
Comprehensive Problem
Russia Spring produces premium bottled water. Russia Spring purchases artesian water, stores
the water in large tanks, and then runs the water through two processes: filtration and bottling.
During February, the filtration process incurred the following costs in processing 150,000 liters:
Wages of workers operating filtration equipment
Manufacturing overhead allocated to filtration
Water
$19,950
22,050
150,000
Russia Spring had no beginning Work-In-Process Inventory in the Filtration Department in
February.
19950
150000
133
1. Compute the February conversion costs in the Filtration Department.
2. The Filtration Department completely processed 150,000 liters in February. What was
the filtration cost per liter?
19950
22 050
+150000
192,000
192000
50000
= 1.28 per liter
At Russia Spring, water is added at the beginning of the filtration process. Conversion costs are
added evenly throughout the process. Now assume that in February, 80,000 liters were
completed and transferred out of the Filtration Department into the Bottling Department. The
70,000 liters remaining in Filtration's ending Work-In-Process Inventory were 80% of the way
through the filtration process. Recall that Russia Spring has no beginning inventories.
Compute the equivalent units of production for direct materials and conversion costs for
the Filtration Department.
