Demo-case-6-solution

Demo-case-6-solution - Demo Case 1 Solution 1 Compound...

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Demo Case 1 Solution: 1. Compound X (barrels) 0 50,000 ? 20,000 (55% complete) Since 0 + ? – 50,000 = 20,000, the amount of Compound X started in the first quarter was 70,000 barrels. 2. For the 20,000 barrels of Compound X in process at the end of the first quarter, they were on average 55 percent complete and equivalent to 11,000 barrels of finished product (= 20,000 barrels × 55%). Total quantity of output for the first quarter became 61,000 barrels (= 50,000 barrels completed and transferred out + 11,000 equivalent barrels). Each barrel of Compound X was assigned a cost of \$3.80 (= \$231,800 ÷ 61,000 barrels). The \$231,800 total manufacturing costs incurred were allocated to two cost objects: \$190,000 (= \$3.80 × 50,000 barrels) to the units transferred out and \$41,800 (= \$3.80 × 11,000 equivalent barrels) to the ending work-in-process inventory, as shown in the following T-account. Compound X (\$)

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Demo-case-6-solution - Demo Case 1 Solution 1 Compound...

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