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.

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.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter5: Process Cost Accounting—general Procedures

Section: Chapter Questions

Problem 12E

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