Question: Refer to the information in Problem In Problem Saline Solutions

Refer to the information in Problem. In Problem, Saline Solutions uses process costing to account for production of its unique compound BG at its River Plant. The River Plant has two departments: R and S. Raw materials are added at two points in the production of BG. First, rubber pellets are added at the beginning of production in Department R. Next, a liquid thinner is added in Department R when the product is 60% complete with respect to conversion costs. Once the basic compound is completed in Department R, it is transferred to Department S for mixing and packaging. The following information is available from the River Plant for May. (No new material is added in Department S.)
Department S Production and Costs: May
Beginning inventory (50,000 units, 30% complete with respect to Department S costs)
Total cost (Department R and Department S) cost: Beginning inventory..... $ 482,424
Current work (490,000 units started)
Department R costs ..................................................................................... $3,449,600
Department S costs ..................................................................................... 1,594,376
The ending inventory has 70,000 units, which are 100 percent complete for Department R costs.

Department R uses FIFO process costing to account for production. In January, beginning work-in-process inventory consisted of 50,000 units, 80 percent complete with respect to conversion. The cost of rubber pellets put in production in January was $2,350,000. The cost of thinner introduced into production in January was $1,057,500. Reported costs per equivalent unit for January were $5 per equivalent unit of rubber pellets and $2.25 per equivalent unit for thinner.

Required
Based on the information available, the ending work-in-process ending inventory in January was:
a. Less than 60 percent complete with respect to conversion cost.
b. Exactly 60 percent complete with respect to conversion cost.
c. At least 60 percent complete with respect to conversion cost.
d. There is not enough information to determine the degree of completion.



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  • CreatedDecember 18, 2013
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