XOUT Inc.manufactures stone counter top cleaner in a continuous process and uses a process cost system. During the month the company started 500,000 gallons of raw material into process at a cost of $450,000. It takes 1.25 gallons of raw material to produce 1 gallon of cleaner. In addition the company spent $1,200,000 in direct labor cost and $2,000,000 in manufacturing OH. During the month 350,000 gallons of cleaner were complete and transferred to finished goods. 300,000 gallons of cleaner were sold for a total price of $3,100,000. At the end of the month the stone cleaner still in WIP inventory was 100% complete as to raw matl. and 35% complete as to direct labor and factory OH.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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XOUT Inc.manufactures stone counter top cleaner in a continuous process and
uses a process cost system. During the month the company started 500,000
gallons of raw material into process at a cost of $450,000. It takes 1.25 gallons
of raw material to produce 1 gallon of cleaner. In addition the company spent
$1,200,000 in direct labor cost and $2,000,000 in manufacturing OH. During the
month 350,000 gallons of cleaner were complete and transferred to finished
goods. 300,000 gallons of cleaner were sold for a total price of $3,100,000. At
the end of the month the stone cleaner still in WIP inventory was 100% complete
as to raw matl. and 35% complete as to direct labor and factory OH.
Transcribed Image Text:XOUT Inc.manufactures stone counter top cleaner in a continuous process and uses a process cost system. During the month the company started 500,000 gallons of raw material into process at a cost of $450,000. It takes 1.25 gallons of raw material to produce 1 gallon of cleaner. In addition the company spent $1,200,000 in direct labor cost and $2,000,000 in manufacturing OH. During the month 350,000 gallons of cleaner were complete and transferred to finished goods. 300,000 gallons of cleaner were sold for a total price of $3,100,000. At the end of the month the stone cleaner still in WIP inventory was 100% complete as to raw matl. and 35% complete as to direct labor and factory OH.
a. Assume there are no beginning inventories in work in process and finished
goods. Use the following form to determine the cost per equivalent unit of
production. the ending inventory value of WIP and F.G. inventory, the Cost of
Goods Sold and the Gross Profit for the month.
MATL
LABOR
O.H.
UNITS
COMP
%
EQUIVALEN
T
UTS
COMPLETE
UTS TRANS
TOTAL EQ.
UTS
COST PER
EQUV UNTS
TOTAL
COST/EQ.
UNIT=
b. Use the "T" accounts below to determine the ending inventory value of WIP,
F.G. inventory, and the Cost of Goods Sold.
WORK IN
PROCESS
INVENTORY
FINISHED GOODS
COST OF GOODS
SOLD
INVENTORY
c. What is the gross profit for the month?
Transcribed Image Text:a. Assume there are no beginning inventories in work in process and finished goods. Use the following form to determine the cost per equivalent unit of production. the ending inventory value of WIP and F.G. inventory, the Cost of Goods Sold and the Gross Profit for the month. MATL LABOR O.H. UNITS COMP % EQUIVALEN T UTS COMPLETE UTS TRANS TOTAL EQ. UTS COST PER EQUV UNTS TOTAL COST/EQ. UNIT= b. Use the "T" accounts below to determine the ending inventory value of WIP, F.G. inventory, and the Cost of Goods Sold. WORK IN PROCESS INVENTORY FINISHED GOODS COST OF GOODS SOLD INVENTORY c. What is the gross profit for the month?
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