Question

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.

Required
a. Assume that Saline Solutions used weighted-average process costing and that the cost per equivalent unit for May for materials in Department S is $7.20 and for conversion costs it is $3.20. How complete is ending inventory with respect to conversion costs?
b. What is the cost of product transferred out of Department S for May?
c. What is the cost of ending inventory in Department S for May?



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  • CreatedDecember 18, 2013
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