Proteger Company manufactures insect repellant lotion. The Mixing Department, th
ID: 2340540 • Letter: P
Question
Proteger Company manufactures insect repellant lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellant. The following data are for the current year:
Direct materials are added at the beginning of the process. Ending inventory is 95 percent complete with respect to direct labor and overhead. The cost of goods transferred out for the year is:
a.$3,780,000
b.$3,571,200
c.$3,024,000
d.$4,471,200
Work in process, January 1 — Gallons started 900,000 Gallons transferred out 756,000 Direct materials cost $900,000 Direct labor cost $2,000,000 Overhead applied $1,571,200Explanation / Answer
Correct Answer ---a. $3,780,000.
Calculations
Units
Reconciliation of Units
A
Opening WIP
0
B
Introduced
900,000
C=A+B
TOTAL
900,000
D
Transferred
756,000
E=C-D
Closing WIP
144,000
Statement of Equivalent Units
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
756,000
100%
756,000
100%
756,000
Closing WIP
144,000
100%
144,000
95%
136,800
Total
900,000
Total
900,000
Total
892,800
Cost per Equivalent Units
COST
Material
Conversion Cost
TOTAL
Cost incurred during period
$ 900,000.00
$ 3,571,200.00
$ 4,471,200.00
Total Cost to be accounted for
$ 900,000.00
$ 3,571,200.00
$ 4,471,200.00
Total Equivalent Units
900,000
892,800
Cost per Equivalent Units
$ 1.00
$ 4.00
Statement of cost
Cost
Equivalent Cost/unit
Ending WIP
Transferred
Units
Cost Allocated
Units
Cost Allocated
Material
$ 1.00
144,000
$ 144,000.00
756,000
$ 756,000.00
Conversion Cost
$ 4.00
136,800
$ 547,200.00
756,000
$ 3,024,000.00
TOTAL
$ 691,200.00
TOTAL
$ 3,780,000.00
Units
Reconciliation of Units
A
Opening WIP
0
B
Introduced
900,000
C=A+B
TOTAL
900,000
D
Transferred
756,000
E=C-D
Closing WIP
144,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.