Question

how did the get the 1200 budgeted quantity of cost driver

EgyptianEgyptian

Spa produces two different spa​ products:

RelaxRelax

and

RefreshRefresh.

The company uses three operations to manufacture the​ detergents: mixing,​ blending, and packaging.

LOADING...

​(Clickthe icon to view the additional​ information.)The budgeted number of containers and expected direct materials and the budgeted conversion costs for

MayMay

are as​ follows:

LOADING...

​(Clickthe icon for the budget​ information.)Read therequirements

LOADING...

.

Requirement 1. Calculate the conversion cost rates for each department.

Determine the formula and then calculate the conversion cost rate for each department. ​(Round the conversion cost rate to the nearest​ cent.)

Budgeted conversion cost

/

Budgeted quantity of cost driver

=

Conversion cost rate

Mixing

$11,760

/

1,200

=

$9.80

Blending

/

=

Enter any number in the edit fields and then click Check Answer.

4 parts remaining

Clear All

Check Answer

More Info

Because of the materials​ used,

RelaxRelax

is produced in powder form in the mixing department and then transferred to the blending department and then onto packaging.

RefreshRefresh

is produced in liquid form in the blending department and is then transferred to packaging.

EgyptianEgyptian

Spa applies conversion costs based on​labor-hours in the mixing department. It takes

33

minutes to mix the ingredients for a container of

RelaxRelax.

Conversion costs are applied based on the number of containers in the blending departments and on the basis of​ machine-hours in the packaging department. It takes

0.50.5

minutes of machine time to fill a​container, regardless of the product.

PrintDone

More Info

The budgeted number of containers and expected direct materials cost for each product are as​ follows:

	Relax			Refresh
Number of containers		24,000			18,000
Direct materials cost		$17,160			$13,140

The budgeted conversion costs for each department for

MayMay

are as​ follows:

	Allocation of	Budgeted
Department	Conversion Costs	Conversion Cost
Mixing	Direct labor hours	$11,760
Blending	Number of containers	$20,160
Packaging	Machine hours	$2,800

PrintDone

Answer 1

Particulars	Mixing	Blending	Packaging
Application of Conversion Cost Based on	Number of Labour Hours	Number of Containers	Number of Machine hours
Convertion Costs	11760	20160	2800
Number of labour Hours/Containers/Machine Hours or COST Driver	1200	42000	350(WN)
Convertion Cost Rate / Cost Driver	9.8	0.48	8
WN- Calculation of Machine Hours
It takes 0.5 Minutes for One Container
a)Total Containers ( 24000+18000)	42000
b)Number of Machine Minutes(+42000*0.5)	21000
c) Number of Machine hours(b/60)	350	Machine Hours
Particulars	Relax	Refresh
Number of Containers	24000	18000
Particulars	Relax	Refresh
Direct Material Cost	17160	13140
Convertion Costs
Mixing(Fully for Relax)	11760	0
Blending(No. of Containers * Conv rate/Cost Driver)	11520	8640
Packaging((0.5 Minutes * Conv Rate/Cost Driver*Number of Containers)/60))	1600	1200
Total Cost	42040	22980
Note-Formatting of the Question was not Good.However I tried my level best to Solve this