Problem:
The formula for a chemical compound requires one pound of Chemical X and one pound of Chemical Y. In the simplest sense, one pound of Chemical X is processed in Department A and transferred to Department B for further processing where one pound of Chemical Y is added when the process is 50% complete. When the processing is complete in Department B, the finished compound is transferred to finished goods. The process is continuous, operating 24 hours a day.
Normal spoilage occurs in Dept. A. 5% of material is lost in the first few seconds of processing.
No spoilage occurs in Dept. B.
The following data are available for the month of October:
DEPARTMENT A:
Units in process, October 1st is 8,000.
stage of completion at beg. inventory is 3/4.
Untis started of transferred in are 50,000.
Units transferred out are 46,500.
Units in process, October 31st are UNKNOWN.
Stage of completion of End. Inven. is 1/3.
DEPARTMENT B:
Units in Process, October 1st are 10,000.
Stage of completion of beg. inven. is 3/10.
Units started or transferred in are UNKNOWN.
Units transferred out are UNKNOWN.
Units in Process, October 31st are UNKNOWN.
Stage of completion of end. inven. is 1/5.
units of chemical Y added in dept. B are 44,500.
Required:
A.) Prepare a schedule showing finished equivalents for Chemical X and for conversion cost for Department A using FIFO method.
B.) Determine for Department B the number of units of good product completed during October and the number of units in process on October 31st.
C.) Prepare a schedule for department B showing finished equivalents for preceeding department cost, cost of Chemical Y, and conversion cost using the FIFO method.