Final answer:
The cost of the lubricant transferred to finished goods is $360,000, calculated by multiplying the completed 72,000 gallons by the cost per gallon of $5. The work-in-process ending inventory is valued at $21,140, determined by multiplying the incomplete 14,000 gallons by 38% completion and the cost per gallon.
Step-by-step explanation:
To compute the cost of the lubricant transferred to finished goods and the amount in work-in-process ending inventory for Duffield Lubricants, we can use the given data. Since there is no starting work-in-process inventory and the completion rate for the goods is provided, we have a straightforward cost assignment task.
The total cost of production for December equals the sum of materials and conversion costs, which is $187,568 + $245,424 = $432,992. The cost per gallon of production is therefore $432,992 / 86,000 gallons = $5 per gallon.
For the finished goods, we have 72,000 gallons completed which means the cost of the goods transferred to finished goods is 72,000 gallons * $5 per gallon = $360,000.
For the gallons not completed, which is 86,000 - 72,000 = 14,000 gallons, the production supervisor estimates that the work in process is 38 percent complete. The cost assigned to this partially completed inventory must take into account the degree of completion. Therefore, the work-in-process ending inventory cost is 14,000 gallons * 38% * $5 per gallon = $21,140.
So, the cost of the lubricant transferred to finished goods is $360,000 and the work-in-process ending inventory cost as of December 31 is $21,140.