FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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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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