Vita-Heath Company Manufactures Three Different Types of Vitamins: Vitamin C

Essay

Vita-Heath Company manufactures three different types of vitamins: vitamin C, vitamin B, and vitamin D.The company uses four operations to manufacture the vitamins: mixing, tabletting, encapsulating, and bottling.Vitamins C and B are produced in tablet form (in the tabletting department)and vitamin D is produced in capsule form (in the encapsulating department).Each bottle contains 80 vitamins, regardless of the product.Conversion costs are applied based on the number of bottles in the tabletting and encapsulating departments.Conversion costs are applied based on direct labour hours in the mixing department.It takes two minutes to mix ingredients for a 80-unit bottle for each product.Conversion costs are applied based on machine hours in the bottling department.It takes one-tenth of a minute of machine time to fill a 80-unit bottle, regardless of product.Vita-Health Company uses operation costing.The company is planning to complete one batch of each type of vitamin in March.The budgeted number of bottles and expected direct material cost for each type of vitamin is as follows:
The budgeted conversion costs for March are as follows:
Required:
1.Calculate the conversion cost rates for each department.2.Calculate the budgeted cost of goods manufactured for vitamin C, vitamin B, and vitamin D for the month of March.3.Calculate the cost per 80-unit bottle for each type of vitamin for the month of July.