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Solex Company produces a high-quality insulation material that passes through two production processes

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Solex Company produces a high-quality insulation material that passes through two production processes. A quantity schedule for June for the first process follows:

Quantity Schedule

Units to be accounted for:
Work in process, June 1 (materials 75%
Complete: conversion 40% complete) ........ 60,000
Started into production ............................ 280,000
Total units to be accounted for ...................... 340,000

Equivalent Units
___________________________
Materials Conversion
Units accounted for as follows:
Transferred to the next process ..................... 300,000 ? ?
Work in process, June 30 (materials 50%
Complete: conversion 25% complete) 40,000 ? ?
Total units accounted for ............................... 340,000 ? ?

Cost in the beginning work in process inventory of the first processing department were: materials, $56,600; and conversion cost, $14,900. Cost added during June were: materials, $385,000; and conversion cost, $214,500.

Required:

1. Assume that the company uses the weighted-average method of accounting for units and cost. Determine the equivalent unit for June for the first process.
2. Compute the cost per equivalent unit for June for the first process.

Page 2

Exercise 5-1 Fixed and Variable Cost Behavior (LOI)
Koffee Express operates a number of expresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $0.26

Required:
1. Fill in the following table with your estimates of total cost and cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.

Cups of Coffee Served in a Week
1,800 1,900 2,000

Fixed cost ............................................... ? ? ?

Variable cost ............................................ ? ? ?

Total cost ................................................ ? ? ?

Cost per cup of coffee served ........................ ? ? ?

2. Does the cost per cup of coffee served increase, decrease, or remain the same as the number
Of cups of coffee served in a week increases? Explain.

See attached file for full problem description.