connect ACCOUNTING Question 3 fof6 000 point Exercise 6-37 Process Costing (LO 6
ID: 2396536 • Letter: C
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connect ACCOUNTING Question 3 fof6 000 point Exercise 6-37 Process Costing (LO 6-3) Graham Petroleum produces oil On May 1. E had no work-in-process inventory it started production of 244 ition barress of oli in May and shipped 216 mition barrels Materials Conversion costs (labor and overhead) $ 7.968 miion Required: The production supervisor estmaties that the ending work-in-process is 60 pescent complete on May 31 Compute the cost of oll shipped in the pipeline and the amou ns.For example, enber insed "1,00 000 Exercise s-37 Process Costing (LO 63)Explanation / Answer
Units in Million
Reconciliation of Units
Opening WIP
0
Introduced
244
TOTAL
244
Shipped
216
Closing WIP
28
Statement of Equivalent Units (in Million)
Material
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Shipped
216
100%
216
100%
216
Closing WIP
28
60%
16.8
60%
16.8
Total
244
Total
232.8
Total
232.8
Cost per Equivalent Units (in Million)
COST
Material cost
Conversion cost
TOTAL
Current cost
$ 6,000.00
$ 7,968.00
$ 13,968.00
Total Equivalent Units
232.8
232.8
Cost per Equivalent Units
$ 25.77
$ 34.23
$ 60.00
Statement of cost (in Millions)
Cost
Cost/unit
Closing WIP
Transferred
Units
Cost Allocated for WIP
Units
Cost Allocated for shipped oil
Material
$ 25.77
16.8
$ 432.99
216.00
$ 5,567.01
$ -
Conversion cost
$ 34.23
16.8
$ 575.01
216.00
$ 7,392.99
$ -
$ -
Total
$ 60.00
TOTAL
$ 1,008.00
TOTAL
$ 12,960.00
Answers
Cost of Oil Shipped in the pipeline $ 12960 Million
Work in Process ending Inventory $1008 Million
Units in Million
Reconciliation of Units
Opening WIP
0
Introduced
244
TOTAL
244
Shipped
216
Closing WIP
28
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