Fresh N Kleen A Chemical Company Produces Its Primary Product

Fresh ‘n’ Kleen, a chemical company, produces its primary product, Splash All-Purpose Cleaner, in 500 millilitre containers. Production takes place in two departments: Mixing and Packaging. The manufacturing costs for each department for November were:

In November the company produced 75 000 litres of Splash, which was packed into 150 000 containers. There were no work in process inventories.
1. What is the cost per container for Splash?
2. Prepare the journal entries to record the production costs for November. Assume that the costs of the two production departments are charged to separate work in process inventory accounts.
3. Evaluate this approach to product costing.

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