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CoursHeroTranscribedText: cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?inprogress=true G 16 & 7) eBook Appendix: Normal and Abnormal Spoilage in Process Costing, Changes in Output Measures, Multiple Departments Grayson Company produces an industrial chemical used for cleaning and lubricating machinery. In the Mixing Department, liquid and dry chemicals are blended to form slurry. Output is measured in gallons. In the Baking Department, the slurry is subjected to high heat, and the residue appears in irregular lumps. Output is measured in pounds. In the Grinding Department, the irregular lumps are ground into a powder, and this powder is placed in 50-pound bags. Output is measured in bags produced. In April, the company reported the following data: a. The Mixing Department transferred 51,600 gallons to the Baking Department, costing $206,400. Each gallon of slurry weighs two pounds. b. The Baking Department transferred 103,200 pounds (irregular lumps) to the Grinding Department. At the beginning of the month, there were 5,600 gallons of slurry in process, 35 percent complete, costing $31,900 (transferred-in cost of $22,400 plus conversion cost of $9,500). No additional direct materials are added in the Baking Department. At the end of April, there was no ending work in process. Conversion costs for the month totaled $220,248. Normal loss during baking is 5 percent of good output. All transferred-in materials are lost, but since loss occurs uniformly throughout the process, only 50 percent of the conversion units are assumed to be lost. c. The Grinding Department transferred 2,580 bags of chemicals to its finished goods warehouse. Beginning work in process for this department was 24,500 pounds, 45 percent complete with the following costs: transferred-in cost, $132,000; conversion cost, $16,000. Bags are used at the end of the process and cost $1.40 each. During bagging, normally one out of every 11 bags is torn and must be discarded. No powder is lost (the tearing occurs when the bag is being attached to a funnel). Conversion costs for the month's production are $170,382. There is no ending work in process. Required: 1. Using FIFO, calculate the cost per bag of chemicals transferred to the finished goods warehouse. Round per-unit costs to the nearest cent. Round other solutions to the nearest unit or dollar as needed. Baking Department (to obtain the cost of goods transferred out): Units to account for: Beginning work in process 11,200 Units started 103,200 Total units to account for 114,400 V Previous Nextom/ilrn/takeAssignment/takeAssignmentMain.do?inprogress=true (Ch 6 & 7) eBook Total 440,126 Grinding Department: Total units accounted for 2,554 Note: (For direct materials: 11 bags are used to get 10 good bags). Unit cost of units started and completed: Direct Conversion Transferred Materials Costs In Total Costs added 3,973 $ 170,382 440,126 Total equivalent units 2,554 V 2,334 2,064 Cost per equivalent unit 1.56 V 73 V 213.24 $ 287.8 Unit cost of units from beginning work in process: Prior period costs $ 148,000 V Costs to finish: Direct materials 764 Conversion costs 19,674 X Total 168,438 X Previous

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