Graham Petroleu produces oil. On May 1, it had no work-in-process inventory. it
ID: 2518573 • Letter: G
Question
Graham Petroleu produces oil. On May 1, it had no work-in-process inventory. it started production of 207 million barrels of oil in May ad shipped 177 million barrels in the pipeline. The costs of the resources used by Graham in ay consist of the following:
Materials--> $2,970 million
Conversion Costs (labor and overhead)--> $3,270 million
Requires
The production suervsor estimates that the ending work in prcess is 60% complete on May 31. Compute the cost of oil shipped in the piepline and the amount in work-in-process ening inventory as of May 31. (No not round intermediate calculations. Enter your answers in millions. For example, enter 1 instead of 1,000,000.)
Cost of oil shipped in the pipeline ______ million
Work-in-process ending inventory ______ million
****Please show all work and calculations***
Explanation / Answer
Equivalent unit = 177+(30*60%) = 195 million barrels
Cost per equivalent unit = (2970+3270)/195 = 32 per million barrel
Cost of oil shipped in the pipeline = (32*177) = 5664 million
Work in process ending inventory = (32*18) = 576 million
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