Question

Sue's Soup Products uses a process costing system with two processing departments: the Mixing and Cooking Department and the Canning Department. Work in process inventories are reduced to zero each month. In March, the Mixing and Cooking Department incurred manufacturing costs of $63,000 to mix 42,000 gallons of soup. The Canning Department incurred manufacturing costs of $9,000. A total of 170,000 cans of soup were transferred to the finished goods warehouse during the month. The unit cost per gallon of soup transferred to the Canning Department during March was: Group of answer choices $1.50. $1.62. $1.71. $1.83.

Answer 1

Answer:

Unitary cost per gallon transfer= $1.5 per gallon

Explanation:

Giving the following information:

In March, the Mixing and Cooking Department incurred manufacturing costs of $63,000 to mix 42,000 gallons of soup.

To calculate the unit cost per gallon, we need to divide the manufacturing cost of Mixing and Cooking for the number of gallons.

Unitary cost per gallon transfer= 63,000/42,000= $1.5 per gallon