The formula for a chemical compound requires one pound of Chemical X and one pound of Chemical Y. In the simplest sense, one pound of Chemical X is processed in Department A and transferred to Department B for further processing where one pound of Chemical Y is added when the process is 50% complete. When the processing is complete in Department B, the finished compound is transferred to finished goods. The process is continuous, operating 24 hours a day.
Normal spoilage occurs in Dept. A. 5% of material is lost in the first few seconds of processing.
No spoilage occurs in Dept. B.
The following data are available for the month of October:
Units in process, October 1st is 8,000.
stage of completion at beg. inventory is 3/4.
Untis started of transferred in are 50,000.
Units transferred out are 46,500.
Units in process, October 31st are UNKNOWN.
Stage of completion of End. Inven. is 1/3.
Units in Process, October 1st are 10,000.
Stage of completion of beg. inven. is 3/10.
Units started or transferred in are UNKNOWN.
Units transferred out are UNKNOWN.
Units in Process, October 31st are UNKNOWN.
Stage of completion of end. inven. is 1/5.
units of chemical Y added in dept. B are 44,500.
A.) Prepare a schedule showing finished equivalents for Chemical X and for conversion cost for Department A using FIFO method.
B.)Determine for Department B the number of units of good product completed during October and the number of units in process on October 31st.
C.)Prepare a schedule for department B showing finished equivalents for preceeding department cost, cost of Chemical Y, and conversion cost using the FIFO method.© BrainMass Inc. brainmass.com June 3, 2020, 4:53 pm ad1c9bdddf
1. Using FIFO, the 8000 in the beginning inventory will be transferred out first, which since chemical X is added at the beginning of the process, there's no additional material cost for these 8000 units. And the finished equivalents = 8000*3/4=6000
Then in the 46500 units transferred out only 46500-8000=38500 units are started in October.
For the total 50,000 units started, the cost is 50000 pounds of chemical X, which will have a 50000*5%=2500 (pounds) spoilage in Dept A.
Therefore, ending units in process is
50000-38500-2500=9000 units (in 1/3), whose finished ...
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