Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net- realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories. Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ- 5. Finished goods inventory in gallons (October 1) October sales in gallons October production in gallons Additional processing costs Final sales value per gallon Problem 17-29 Part 2 HTP-3 PST-4 RJ-5 PST-4 63,900 410,000 1,040,000 520,000 $1,044,000 $991,000 5.70 $ 7.70 Value of inventory HTP-3 $ 26,500 820,000 2. Determine the dollar values of the finished-goods inventories for HTP-3, PST–4, and RJ-5 as of October 31. (Round intermediate calculations of "Cost per gallon" to the nearest cent.) RJ-5 4,700 235,000 255,000 $ 82,000 6.70 $
Biondi Industries is a manufacturer of chemicals for various purposes. One of the processes used by Biondi produces HTP-3, a chemical used in hot tubs and swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a product that is sold to fertilizer manufacturers. Biondi uses the net- realizable-value method to allocate joint production costs. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Biondi Industries uses FIFO (first-in, first-out) in valuing its finished-goods inventories. Data regarding Biondi's operations for the month of October are as follows. During this month, Biondi incurred joint production costs of $2,550,000 in the manufacture of HTP-3, PST-4, and RJ- 5. Finished goods inventory in gallons (October 1) October sales in gallons October production in gallons Additional processing costs Final sales value per gallon Problem 17-29 Part 2 HTP-3 PST-4 RJ-5 PST-4 63,900 410,000 1,040,000 520,000 $1,044,000 $991,000 5.70 $ 7.70 Value of inventory HTP-3 $ 26,500 820,000 2. Determine the dollar values of the finished-goods inventories for HTP-3, PST–4, and RJ-5 as of October 31. (Round intermediate calculations of "Cost per gallon" to the nearest cent.) RJ-5 4,700 235,000 255,000 $ 82,000 6.70 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Biondi Industries: Chemical Manufacturing and Inventory Management**
Biondi Industries specializes in manufacturing chemicals for diverse applications. Among several processes, three primary chemicals produced are:
- **HTP–3**: Used in hot tubs and swimming pools.
- **PST–4**: Utilized in pesticides.
- **RJ–5**: Supplied to fertilizer manufacturers.
Biondi employs the net-realizable-value method to allocate joint production costs, maintaining a consistent ratio of output to input materials each month. The company operates on a **FIFO (first-in, first-out)** basis for valuing finished goods inventories.
### October Operations Overview:
- **Joint Production Costs**: $2,550,000
#### Inventory and Sales Data for October:
| | **HTP–3** | **PST–4** | **RJ–5** |
|--------------------------|-----------|-----------|----------|
| Finished goods inventory (gallons) - Oct 1 | 26,500 | 63,900 | 4,700 |
| October sales (gallons) | 820,000 | 410,000 | 235,000 |
| October production (gallons) | 1,040,000 | 520,000 | 255,000 |
| Additional processing costs | $1,044,000 | $991,000 | $82,000 |
| Final sales value per gallon | $5.70 | $7.70 | $6.70 |
### Problem 17-29 Part 2:
Calculate the finished-goods inventory value for each chemical as of October 31, based on the provided data. **Round all intermediate cost-per-gallon calculations to the nearest cent.**
#### Value of Inventory:
| | **Value of Inventory** |
|----------|------------------------|
| **HTP–3** | |
| **PST–4** | |
| **RJ–5** | |
**Note**: The value of inventory calculation requires applying the FIFO method to determine the current inventory cost based on remaining stocks and production costs.
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