Appendox: Notmal and abnormal Spoilage in Process Costing, Changes in Output Measures, Multiple Departmonts Grayson Company produces an industrial chemical used for cleaning and lubricating atachinery, In the Mising Department, llewid and dry ehernicals are blended to form slurry. Dutput is messured in gallons. In the Baking Department, the slurry is subjected to high heat, and the residue appeirs if irregular lumps. Gutput is messured in pounds. In the Grinding Department, the irregidar lumps are ground into a powder, and tis pender is placed in 50-pound bags. Output is measured in bags produced. In April, the company reported the following datat a. The Mixing Department transferred 50,000 gallons to the Baking Department, costing $250,000. Each gallon of alurry weighs twe pounde b. The Baking Department transferred 100,000 pouinds (irregidar lamps) to the Grinfing Department. at the beginning of the menth, there were.5,000 gallons of slurry in proces 5,25 percent complete, costing $75,000 (transferred-ln cost of 525,000 pius conversion cost of $20,000 ). Nat additicrid direct materials are added in the Baking Department. At the end of Aprii, there was rio ending work ir process, Conversion costc for the month totaled 5205,000 . Normal loss during baking is. 5 percent of good output, All transferred-in materiats are lost, but aince loss occurs uniformly throughout the process, only 50 percent of the corversion units are assumed to be lost. c. The Grinding Department transferred 2,500 bags of chemicals to its finished goods warehouse; Begineing work in process for this ilegartimnti was 25,000 pounds, 40 percent complete with the following costs: transferred-in cost, 4132,500; conversiori cost, 515,000 . Bags are ised at the end of the process and cost 31,50 each. During bagging, normally one out of every If bags is tom and must be discanded. No powider is fort (the tearicy occurs when the bag is beirio attached to a funnel). Conversion costs for the month's productlon are $172, 200 . There is ne ending work li brocest. 1. Using FIFO, calculate the cost per bag of chemicals traneferred to the finished goods warehouse. Round per-unit costs to the nimirest cent found ail other answers to the nearest unit of dollar, if required. Baking Department (to obtain the cost of goods transferred out): Tquivalent Units Cost of units transferred out: Started and competed Prior puried conte Coster to finish Nomal spollage Noter ifor direct materiah: 11 bogs are used to ont 10 pood bagily tinit cost of unites startesi and coenpileted: tint cost of units from beginning work in process: of the transferring department. 2. Prepare the fournal entry needed to remove abnormal apolioe from the Baking dipartment. Fresitaci 7 chear My whow Consider whether spoltage is normal or abtiomial and handle t accordingly. Appendox: Notmal and abnormal Spoilage in Process Costing, Changes in Output Measures, Multiple Departmonts Grayson Company produces an industrial chemical used for cleaning and lubricating atachinery, In the Mising Department, llewid and dry ehernicals are blended to form slurry. Dutput is messured in gallons. In the Baking Department, the slurry is subjected to high heat, and the residue appeirs if irregular lumps. Gutput is messured in pounds. In the Grinding Department, the irregidar lumps are ground into a powder, and tis pender is placed in 50-pound bags. Output is measured in bags produced. In April, the company reported the following datat a. The Mixing Department transferred 50,000 gallons to the Baking Department, costing $250,000. Each gallon of alurry weighs twe pounde b. The Baking Department transferred 100,000 pouinds (irregidar lamps) to the Grinfing Department. at the beginning of the menth, there were.5,000 gallons of slurry in proces 5,25 percent complete, costing $75,000 (transferred-ln cost of 525,000 pius conversion cost of $20,000 ). Nat additicrid direct materials are added in the Baking Department. At the end of Aprii, there was rio ending work ir process, Conversion costc for the month totaled 5205,000 . Normal loss during baking is. 5 percent of good output, All transferred-in materiats are lost, but aince loss occurs uniformly throughout the process, only 50 percent of the corversion units are assumed to be lost. c. The Grinding Department transferred 2,500 bags of chemicals to its finished goods warehouse; Begineing work in process for this ilegartimnti was 25,000 pounds, 40 percent complete with the following costs: transferred-in cost, 4132,500; conversiori cost, 515,000 . Bags are ised at the end of the process and cost 31,50 each. During bagging, normally one out of every If bags is tom and must be discanded. No powider is fort (the tearicy occurs when the bag is beirio attached to a funnel). Conversion costs for the month's productlon are $172, 200 . There is ne ending work li brocest. 1. Using FIFO, calculate the cost per bag of chemicals traneferred to the finished goods warehouse. Round per-unit costs to the nimirest cent found ail other answers to the nearest unit of dollar, if required. Baking Department (to obtain the cost of goods transferred out): Tquivalent Units Cost of units transferred out: Started and competed Prior puried conte Coster to finish Nomal spollage Noter ifor direct materiah: 11 bogs are used to ont 10 pood bagily tinit cost of unites startesi and coenpileted: tint cost of units from beginning work in process: of the transferring department. 2. Prepare the fournal entry needed to remove abnormal apolioe from the Baking dipartment. Fresitaci 7 chear My whow Consider whether spoltage is normal or abtiomial and handle t accordingly