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b sjc.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do ave Exit Sulom t Assignment for Grading ns Exercise 39 Question 6 of 9 chek rk eBook Equivalent Units of Productiosn Kellogg Company manufactures cold cereal products, such as Frosted Flakes. Assume that the inventory in process on March 1 for the Packng Department included 900 pounds of cereal in the packing machine hopper (enough for 600 24-oz. boxes), and 600 empty 24 oz boxes held in the package carousel of the packing machine During March, 50,800 boxes of 24-az. cereal were packaged. Conversion costs are incurred when a box is filled with cereal. On March 31 the packing machine hopper held 825 pounds of cereal, and the package carousel held SSO empty 24-oz. (1%-pound) boxes. Assume that once a box is filled with cereal, it is immediately transferred to the finished goods warehouse Hide Hint(s) Determine the equivalent units of production for cereal, boxes, and conversion costs for March. An equivalent unit is deined as "pounds for cereal and "24-oz, boxes" for boxes and conversion costs. If an amount is zero, enter in "o". Kellogg Company tquivalent Units of Production for Cereal, Boxes, and Conversion Cost For March Cereal [in Boxes fin boces)Conversion Cost (in boxes) 600 inventory in process, March 1 ted and completed in March Transferred to finished goods in March 550 tory in process, March 31 Total now.com/ilm/takeAssignment/takeAssignmentMain.do 102

Explanation / Answer

Answer:

Particulars

Transferred to finished goods in jan

The whole unit inventory in process on March 1 includes both the cereal in the hopper and the boxes in the carousel, and thus, includes no equivalent units for the material during the current period. The reason is because the costs for the cereal and boxes were introduced to the Packing Department in December. Since conversion costs are incurred only when the cereal is filled into boxes, all 600 boxes of the March 1 inventory in process will have conversion costs incurred in March. The product started and completed in March includes 50200 boxes (50800 boxes completed less the 600 in the carousel on March 1). These boxes represent 75300 pounds of cereal (50200 × 24 oz./16 oz.),since there are 16ounces to a pound.

Equivalent units of production:

Particulars

Cereal (in pounds) Boxes (in boxes) Conversion cost (In boxes) Inventory in process, March 1 0 0 600 Started and completed in March 75300 50200 50200

Transferred to finished goods in jan

75300 50200 50800 Inventory in process, March 31 825 550 0 Total 76125 50750 50800

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