Pro Chemicals uses an automated mixing machine in its Mixing Department to combi

Question

Pro Chemicals uses an automated mixing machine in its Mixing Department to combine three raw materials into a product called Trio. On average, each unit of Trio contains $3 of Material X, $6 of Material Y, $9 of Material Z, $2 of direct labor, and $10 of overhead. Total costs charged to the Mixing Department's Work in Process Inventory account during the month were $210,000. There were no units in beginning or ending work in process inventory. How many units were completed and transferred to finished goods inventory during the month?

Explanation / Answer

Direct material cost per unit = Cost of Material X + Cost of material Y + Cost of material Z = $3 + $6 + $9 = $18 per unit

Cost per unit of Trio = Direct material cost + Direct labor cost + Overhead cost = $18 + $2 + $10 = $30 per unit

Total costs charged to Work in process = $210,000

Units completed and transferred to finished gooods inventory = $210,000/$30 = 7,000 units

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