Question -
Stabler Chemical Company has two departments - mixing and cooking. Production activity begins in the mixing department; after mixing, the units are transferred to the cooking department. From cooking, the units are transferred to finished goods. All the materials involved in mixing and conversion costs are incurred uniformly as work progresses through the mixing department. Overhead cost is applied at the rate of 150 percent of direct labor costs.
The following are the cost and other data concern the operations of the mixing department in the month of May and the company uses the FIFO method for accumulating production costs.
Work in process, beginning:
- Units in process - 20,000
- Percent complete with respect to materials - 65%
- Percent complete with respect to conversion - 30%
Costs in the beginning inventory:
- Materials cost - $8,000
- Labor cost - $3,600
- Overhead cost - $5,400
- Unit started into production during the month - 180,000
- Unit completed and transferred out - 170,000
Costs added to production during the month:
- Materials cost - $63,000
- Labor cost - $88,000
- Overhead cost applied - ??
Work in process, ending:
- Units in process - 30,000
- Percent complete with respect to materials - 70%
- Percent complete with respect to conversion - 40%
Required:
a) Compute the number of Units Completed and Transferred Out in May.
b) Compute the equivalent units (EU) for Direct Materials and Conversion Costs for the month of May.
c) Compute the Cost per Equivalent Unit for Direct Materials and Conversion Costs for the month of May.
d) Compute the mixing cost per unit for the month of May.
e) The total cost of finished goods transferred out in May.
f) The total cost of work-in process inventory at May 31.