Our company manufactures Chemical X. Assume the company uses weighted average. Separate direct materials and conversion costs, Chemical X is comprised of two liquids, Liquid A and Liquid B. The formula of Chemical Xis 60% Liquid A, 40% Liquid B. 70% of the mixed liquid is added at the beginning of the process: 30% added at the very end. The average cost of the raw materials is $35 per gallon. At the beginning of the month, there was 1,500 gallons in process, 40% through the process (as to conversion costs). The total costs in beginning WIP is $36,750 for materials and $97,440 for conversion costs. During the month, 15,000 gallons were started. Conversion costs were $455,400 for the month. Compute direct material costs (hint use DM EUP under FIFO). At the end of the month, there were 1,200 gallons in process, 80% through the process. Answer each question separately. DO NOT just complete a table - this will result in a zero! How many units were started AND completed? Completed? a. b. Using FIFO, calculate equivalent units produced C. What is the cost of the material added? (hint: use b.). d. Using FIFO, calculate the cost per equivalent unit produced. e. Using FIFO, what is the journal entry for the transferred to finished goods?
Our company manufactures Chemical X. Assume the company uses weighted average. Separate direct materials and conversion costs, Chemical X is comprised of two liquids, Liquid A and Liquid B. The formula of Chemical Xis 60% Liquid A, 40% Liquid B. 70% of the mixed liquid is added at the beginning of the process: 30% added at the very end. The average cost of the raw materials is $35 per gallon. At the beginning of the month, there was 1,500 gallons in process, 40% through the process (as to conversion costs). The total costs in beginning WIP is $36,750 for materials and $97,440 for conversion costs. During the month, 15,000 gallons were started. Conversion costs were $455,400 for the month. Compute direct material costs (hint use DM EUP under FIFO). At the end of the month, there were 1,200 gallons in process, 80% through the process. Answer each question separately. DO NOT just complete a table - this will result in a zero! How many units were started AND completed? Completed? a. b. Using FIFO, calculate equivalent units produced C. What is the cost of the material added? (hint: use b.). d. Using FIFO, calculate the cost per equivalent unit produced. e. Using FIFO, what is the journal entry for the transferred to finished goods?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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I'm specifically having trouble figuring out what is beginning WIP for direct materials and conversion costs.
Provide step by step explanation.
Transcribed Image Text:Our company manufactures Chemical X. Assume the company uses weighted
average. Separate direct materials and conversion costs,
Chemical X is comprised of two liquids, Liquid A and Liquid B. The formula of Chemical
Xis 60% Liquid A, 40% Liquid B. 70% of the mixed liquid is added at the beginning of the
process: 30% added at the very end.
The average cost of the raw materials is $35 per gallon.
At the beginning of the month, there was 1,500 gallons in process, 40% through the
process (as to conversion costs). The total costs in beginning WIP is $36,750 for materials and
$97,440 for conversion costs.
During the month, 15,000 gallons were started. Conversion costs were $455,400 for
the month. Compute direct material costs (hint use DM EUP under FIFO).
At the end of the month, there were 1,200 gallons in process, 80% through the process.
Answer each question separately. DO NOT just complete a table - this will result in a zero!
How many units were started AND completed? Completed?
a.
b. Using FIFO, calculate equivalent units produced
C.
What is the cost of the material added? (hint: use b.).
d. Using FIFO, calculate the cost per equivalent unit produced.
e. Using FIFO, what is the journal entry for the transferred to finished goods?
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