the Baking 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. 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 measured in bags produced. n April, the company reported the following data: a. The Mixing Department transferred 50,000 gallons to the Baking Department, costing $250,000. Each gallon of slurry weighs two pounds b. The Baking Department transferred 100,000 pounds (irregular lumps) to the Grinding Department. (transferred-in cost of $25,000 plus conversion cost of $10,000). No additional direct materials are added in the Baking Department. At the end of April, there was no ending work tthe beginning of the month, there were 5,000 gallons of slurry process, 25 percent complete, costing $35,000 process. Conversion costs for the month totaled $205,000. Nomal loss during baking is 5 percent of good output. All transferred-in materials are lost, but since loss occurs uniformly throughout the process, only 50 percent the conversion units are be lost assumed c. The Grinding Department transferred 2,500 bags of chemicals to ts finished goods warehouse. Beginning work in process for this department was 25,000 pounds, 40 percent complete with the following costs: bags is torn and must be discarded. No powder is lost (the tearing occurs when the bag is being attached to a funnel), Conversion costs for the month's production are 172.500. There is na ending work in process Required: dollar, if 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 all other answers to the nearest unit Baking Department (to obtain the cost of goods transferred out) Units to account for: 12,000 X Beginning work in process 102,800 X Units started Total units to account for Units accounted for 102,800 x Units transferred out 5.140 X Normal spoilage Abnormal spoilage Total units accounted for Equivalent Units Transferred Conversion Costs In 104,600 X 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 Conversion Transferred Materials Costs Total In 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 A tA 2. Prepare the journal entry needed to remove abnormal spoilage from the Baking department Loss Due to Spoilage Work in Process - Baking