Sugary Drink Ltd produces a soft drink called Fizz Cola, in two-litre bottles. Production takes place in two departments: Mixing and Packing. The manufacturing costs for each department for July were:
In July the company produced 140 000 litres of Fizz Cola, which was packed into 70 000 bottles.
1. What is the cost per bottle of Fizz Cola?
2. Prepare the journal entries to record the production costs for July. Assume that the costs of the two production departments are charged to separate work in process inventory accounts.