Question
Required: 1. Using FIFO, calculate the cost per bag of chemicals transferred to the finished goods warehouse. Round per-unit costs to the nearest cent. Round
Required:
1. Using FIFO, calculate the cost per bag of chemicals transferred to the finished goods warehouse. Round per-unit costs to the nearest cent. Round other solutions to the nearest unit or dollar as needed.
Baking Department (to obtain the cost of goods transferred out):
Appendix: Normal and Abnormal Spoilage in Process Costing, Changes in Output Measures, Multiple Departments Grayson Company produces an industrial chemical used for cleaning and lubricating machinery. In the Mixing Department, liquid and dry chemicals are blended to form slurry. Output is measured in gallons. In the Baking Department, the slurry is subjected to high heat, and the residue appears in irregular lumps. Output is measured in pounds. In the Grinding Department, the irregular lumps are ground into a powder, and this powder is placed in 50-pound bags. Output is measured in bags produced. In April, the company reported the following data:
Required: 1. Using FIFO, calculate the cost per bag of chemicals transferred to the finished goods warehouse. Round per-unit costs to the nearest cent. Round other solutions to the nearest unit or dollar as needed. Baking Department (to obtain the cost of goods transferred out):
Grinding Department:
Note: (For direct materials: 11 bags are used to get 10 good bags).
2. Prepare the journal entry needed to remove spoilage from the Baking and Grinding departments. Round your answers to the nearest dollar if rounding is required.
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Equivalent Units | ||
Conversion Costs | Transferred In | |
Total equivalent units | ||
Total unit cost | $ |
Cost of units transferred out: | ||
Started and competed | $ | |
Prior period costs | $ | |
Costs to finish | ||
Normal spoilage | ||
Total | $ |
Grinding Department:
Total units accounted for |
Note: (For direct materials: 11 bags are used to get 10 good bags).
Unit cost of units started and completed: | ||||
Direct Materials | Conversion Costs | Transferred In | Total | |
Costs added | $ | $ | $ | |
Total equivalent units | ||||
Cost per equivalent unit | $ | $ | $ | $ |
Unit cost of units from beginning work in process: | ||
Prior period costs | $ | |
Costs to finish: | ||
Direct materials | ||
Conversion costs | ||
Total | $ | |
Unit cost | $ | per unit |
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