Opech, Inc., produces oil and ships it in a pipeline. On May 1, it had no work-i

Question

Opech, Inc., produces oil and ships it in a pipeline. On May 1, it had no work-in-process inventory. It started production of 300 million barrels of oil in May and shipped 270 million barrels in the pipeline. The costs of the resources used by Opech in May consist of the following: Required: The production supervisor estimates that the ending work in process is 70 percent complete on May 31. Compute the cost of oil shipped in the pipeline and the amount in work-in-process ending inventory as of May 31. (Enter your answers in millions. For example, enter "1" instead of "1,000,000".)

Explanation / Answer

Particulars Amount ($ in billion) Material cost per barrels (5000/300)            16.67 Conversion costs per barrels (6640/300)            22.13 Cost of Oil shipped in the pipeline Material cost (16.67*270) 4500 Conversion costs (22.13*270) 5975 Total 10475 Work-in-process ending inventory Material cost (16.67*30*100%) 500 Conversion costs (22.13*30*70%) 465 Total 965

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.