Process Costing and a Work in Process Inventory Account Pro Chemicals uses an au

ID: 2492780 • Letter: P

Question

Process Costing and a Work in Process Inventory Account Pro Chemicals uses an automated mixing machine in its Mixing Department to combine three raw materials into a product called Trio. On average, each unit of Trio contains $3 of Material X, $6 of Material Y, $9 of Material Z, $2 of direct labor, and $10 of overhead. Total costs charged to the Mixing Department's Work in Process Inventory account during the month were $210, 000. There were no units in beginning or ending work in process inventory. How many units were completed and transferred to finished goods inventory during the month?

Explanation / Answer

Amount

Material

Material X

$ 3

Material Y

$ 6

Material Z

$ 9

Total Material Cost

$ 18

Direct Labour

$ 2

Prime Cost

$ 20

OverHeads

$ 10

Total Cost

$ 30

Total costs charged to Mixing Department's

Work in Progress Inventory account

during the month $210,000

There is no work in progress in the beginning

and at the end of the period

Therefore the cost per unit is $30. The amount

transferred is $210,000

Total no of Units transferred

The amount transferred

Total cost per Unit

210000

7000 units