Gilbert, Inc., which uses a process costing system, makes a chemical used as a food preservative. The manufacturing process involves Departments A and B. the company had the following total costs and unit costs for completed production last month, when it manufactured 10,000 pounds of the chemical. Neither Department A nor Department B had any beginning or ending work in process inventories.

1. How many Work in Process Inventory accounts would Gilbert use?

2. What dollar amount of the chemical€™s production cost was transferred from Department A to Department B last month?

3. What dollar amount was transferred from Department B to the Finished Goods Inventory account?

4. What dollar amount is useful in determining a selling price for 1 pound of the chemical?

Transcribed Image Text:

Total Cost Unit Cost Deparment A Direcr materials 10,000 2,600 1.300 $13,900 $1.00 0.26 0.13 $1.39 Direc labor Overhead Toal coses Deparment B Direct materials 3,000 700 1,000 S 4,700 18,600 S0.30 0.07 0.10 $0.47 S1.86 Direct labor Overhead Toral costs Totals