The Formula for a Chemical Compound Requires One Pound of Chemical

The formula for a chemical compound requires one pound of Chemical X and one pound of Chemical Y.One pound of Chemical X is processed in Department A and transferred to Department B for further processing where one pound of Chemical Y is added when the process is 50 percent complete.When the processing is complete in Department B,the finished compound is transferred to finished goods.The process is continuous,operating 24 hours a day.
Normal spoilage occurs in Department A.Five percent of material is lost in the first few seconds of processing.No spoilage occurs in Department B.The following data are available for the month of October:

	Dept. A	Dept. B
Units in process, October 1	8,000	10,000
Stage of completion of beginning inventory	3/4	3/10
Units started or transferred in	50,000	?
Units transferred out	46,500	?
Units in process, October 31	?	?
Stage of completion of ending inventory	1/3	1/5
Units of Chemical Y added in Department B		44,500

Required:
a. Prepare a schedule showing finished equivalents for Chemical $X$ and conversion for Depatment $A$ using the FIFO method.
b. Determine for Department $\mathrm{B}$ the number of units of good product completed during October and the number of unit in process on Octobe 31 .

c. Prepare a schedule for Depatment B showing finished equivalents for preceding department cost, cost of Chenical $Y$ , and conversion cost using the FIFO method.

a. $\begin{array}{lll}\text { Units Transferred Out } & \frac{\text { Materials-Chemical X }}{46,500} & \frac{\text { ConversionCosts-Depatment }}{46,500} \\\text { Ending Inventory } & 9,000 & 3,000 \\\text { Begining Inventory-work done in prior period } & \underline{(8,000)} & \underline{6,000} \\& \underline{47,500} & \underline{(43,500)} \\\text { Normal spoilage } 50,000 \text { units X } 5 \%=2,500 \text { units of } &\end{array}$

b. Since the materal in the second department goes in at the 30 percent point and the enchng W1P inventony 15 units complete is the same as the equivalents of material 44,500 , given that units strated plus units in beginning WIP are equal to units complete plus endingWIP $10,000+46,500-44,500=12,000$ units in endingWIP.

c) Department B	Transferred In	Materials	Conversion Costs
Units of Chem Y added in current period	44,500	44,500	44,500
Ending Inventory 10/31	12,000 (from part b)	-0- WIP not 50% complete	2,400 (12,000 x 1/5)
Beginning Inventory 10/1	(10,000) (from fact pattern)	-0- WIP not 50% complete	(3,000) (10,000 * 3/10)
Total equivalent units	46,500	44,500	43,900

Required:
a. Prepare a schedule showing finished equivalents for Chemic al $X$ and conversion for Dep atment $A$ using the FIFO method.
b. Determine for Dep atment B the number of units of good product completed during October and the number of units in process on Octobe 31 .

c. Prepare a schedule for Department $B$ showing finished equivalents for preceding department cost, cost of Chemical $Y$ , and conversion cos using the FIFO method.

Correct Answer:

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Required:
a. Prepare a schedule showing...

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