Question

ChemKill Manufacturing produces a chemical pesticide and uses process costing. There are three processing departments -Mixing, Refining, and Packaging. On January 1, the first department-Mixing--had a zero beginning balance. During January, 45,000 gallons of chemicals were started into production. During the month, 35,000 gallons were completed, and 10,000 remained in process, partially completed. In the Mixing Department, all direct materials are added at the beginning of the production process, and conversion costs are applied evenly throughout the process. During January, the Mixing Department incurred $50,000 in direct materials costs and $211,800 in conversion costs. At the end of the month, the ending inventory in the Mixing Department was 60% complete with respect to conversion costs. The weighted average method is used. The total cost of the chemical pesticide in ending inventory was places, and your final answer to the nearest dollar.) (Round any intermediate calculations two decimal A. $42,120 B. $50,000 C. $211,800 D. $261,800

Answer 1

A. $42,120

Step-by-step explanation:

ChemKill Manufacturing

Weighted Average Method

Equivalent Production Units

Particulars Units % of Completion Equivalent Units

Materials. Conversion Materials. Conversion

Completed 35000 100 100 35000 35000

In Process 10,000 100 60 10,000 6000

Equivalent Units 45000 41000

First we find the equivalent units both for materials and conversion.

Costs

Materials $50,000

Conversion $211,800

Then we find the cost per equivalent unit of production for materials and conversion

Cost Per Equivalent Unit

Materials = $50,000 /45000= $ 1.111

Conversion= $211,800/41000= 5.1658= $ 5.17

Ending Inventory Costs 42130

Materials = 10,000 *$ 1.11= $ 11110

Conversion = 6000 * $ 5.17= $ 31020

The difference is due to rounding off.