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Process costing Connor Chemical Company’s plant processes batches of organic chemical products through three stages after starting with raw materials 1 mixing and blending 2 reaction chamber

Process costing Connor Chemical Company’s plant processes batches of organic chemical products through three stages after starting with raw materials: (1) mixing and blending, (2) reaction chamber, and (3) pulverizing and packing. Connor Chemical’s estimates for the total conversion costs for each of the three processing stages are shown in the following table. These costs include production labor assigned to each stage, support labor performing tasks (such as handling the output of the previous stage and setting up for the new stage), and laboratory testing. Additional materials for packing are needed in the pulverizing and packing stage:

 

MIXING AND BLENDING

REACTION CHAMBERS

PULVERIZING AND PACKING

Production labor

$253,000

$1,144,000

$396,000

Engineering support

22,000

50,600

24,200

Materials handling

19,800

19,800

29,700

Equipment maintenance

11,000

35,200

8,800

Laboratory expenses

22,000

22,000

4,400

Depreciation

44,000

176,000

52,800

Power

35,200

85,800

26,400

General and administrative

17,600

17,600

17,600

Total conversion costs

$424,600

$1,551,000

$559,900

Total number of process hours

8,760

35,040

8,760

Required

(a) Determine the estimated conversion cost driver rate per process hour for each stage. (Round to three digits after the decimal point.)

(b) Consider two of Connor Chemical’s representative products, C206 and C208. Both products are derivatives of ethyl oleate and at the start of the process require the same basic raw materials. Using the information below, determine the total cost of a batch of C206 and a batch of C208:

 

C206

C208

Materials:

 

 

Raw materials, beginning of process

$1,488.00

$1,488.00

Packing materials

$175.20

$280.80

Conversion hours:

 

 

Mixing and blending

6 hours

6 hours

Reaction chamber

24 hours

24 hours

Pulverizing and packing

4 hours

8 hours

Jul 01 2020 View more View Less

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