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OatMeal, Inc. produces cookies that pass through two departments: Mixing and Baking. In the Mixing Department, all direct materials are added at the beginning of

OatMeal, Inc. produces cookies that pass through two departments: Mixing and Baking. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added uniformly. The following information pertains to the Mixing Department for November.

  • Beginning work in process November 1: 90,000 pounds, 60 percent complete with respect to conversion costs. The costs assigned to this material are as follows:
    • Direct Material $20,000
    • Direct Labor 10,000
    • Overhead 30,000

  • Ending Work in process on November 30: 40,000 pounds, 50 percent complete with respect to conversion costs.
  • Units completed and transferred out: 360,000 pounds. The following costs were added during the month:
    • Direct Material $211,000
    • Direct Labor 100,000
    • Overhead 270,000

  • All units are inspected at the 60 percent point of completion. In a typical month, 12,000 pounds of the mixed product is discarded as spoiled. During the current month, there was an unexpected 1,500 spoilage because of inexperienced employees.

Required: Using the first in first out (FIFO) method

  1. Determine the equivalent units produced: Direct Material:______ __Conversion: _________
  2. Compute the cost per equivalent unit: Direct Material:_______ ____Conversion :__________
  3. Determine the value of goods transferred out: ______________
  4. Calculate the value of ending work in process:______________

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