Question

Required information [The following information applies to the questions displayed below.] The November production of MVP’s Minnesota Division consisted of batch P25 (3,400 professional basketballs) and batch S33 (6,000 scholastic basketballs). Each batch was started and finished during November, and there was no beginning or ending work in process. Costs incurred were as follows: Direct Material: Batch P25, $102,000, including $8,000 for packaging material; batch S33, $88,500. Conversion Costs: Preparation Department, predetermined rate of $6.50 per unit; Finishing Department, predetermined rate of $5.00 per unit; Packaging Department, predetermined rate of $0.70 per unit. (Only the professional balls are packaged.) 2. Compute the November product cost for each type of basketball. (Round your intermediate and final answers to 2 decimal places.)

Answer 1

Computation of product cost
S.no.	Particulars	Batch P25 (professional Basketball)	Batch S33 (scholastic basketballs)
a	Number of units	3400	6000
b	Direct material	$ 94,000.00#	$       88,500.00
c	Conversion cost
	Preparation Department (a* $6.50)	$       22,100.00	$       39,000.00
	Finishing Department (a* $5.00)	$       17,000.00	$       30,000.00
	Packaging Department (a* $0.70)	$         2,380.00	$                      -
d	Under absorption of Packaging cost	$         5,620.00#	$                      -
e	Total Cost of product	$    144,500.00	$    163,500.00
f	Cost of product/unit (e/a)	$               42.50	$               27.25

# Since $ 8000 of packaging exp is considered separately and their is under absorption of packaging expenses by $5620 ($8000-$2380).

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