Winter Lips produces a lip balm used for cold-weather sports. The balm is manufactured in a single processing department. No lip balm was in process on May 31, and Winter Lips started production on 20,400 lip balm tubes during June. Direct materials are added at the beginning of the process, but the conversion costs are incurred evenly throughout the process. Completed production for June totaled 15,200 units. The June 30 work in process was 40% of the way through the production process. Direct materials costing $4,080 were placed in production during June, and direct labor of $3,315 and manufacturing overhead of $1,005 were assigned to the process.
1. Draw a time line for Winter Lips
2. Use the time line to help you compute the total equivalent units and the cost per equivalent unit for June.
3. Assign total costs to (a) units competed and transferred to Finished Goods and (b) units still in process at June 30.
4. Prepare a T-account for Work in Process Inventory to show activity during June, including the June 30 balance.
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