(AlCPA) Process costing with some purchased inventory Bisto Corporation manufactures valves and pumps for liquids. On December 1,1992, Bisto paid $25,000 to the Poplen Company for its Watertite valve. Bisto planned to carry on Poplen's procedure of having the valve casing and parts cast by an independent foundry and doing the grinding and assembling in its own plant.

Bisto also purchased Poplen's inventory of valves at 80 percent of its cost to Poplen. The purchased inventory was comprised of the following:

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Units Raw materials (unfinished casings and parts) 1,100 Work in process: Grinding (25% complete). 800 Assembling (40% complete) 600 Finished valves 900