Weighted Average Method, Two-Department Analysis, Change in Output Measure Healthway uses a process-costing system to...

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Weighted Average Method, Two-Department Analysis, Change in Output Measure Healthway uses a process-costing system to compute the unit costs of the minerals that it produces. It has three departments: Mixing, Tableting and Bottling. In Mixing, at the beginning of the process all materials are added and the ingredients for the minerals are measured, sifted, and blended together. The mix is transferred out in gallon containers. The Tableting Department takes the powdered mix and places it in capsules. One gallon of powdered mix converts to 1,600 capsules. After the capsules are filled and polished, they are transferred to Bottling where they are placed in bottles, which are then affixed with a safety seal and a lid and labeled. Each bottle receives 50 capsules During July, the following results are available for the first two departments (direct materials are added at the beginning in both departments) Mixing Tableting Beginning inventories: Physical units 5 gallons 4,000 capsules Costs: Direct materials $120 $32 Direct labor 128 20 Overhead Transferred in Current production Transferred out Ending inventory 140 125 gallons 198,000 capsules 6000 Costs

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