Chips R Us Inc. produces gourmet chocolate chip cookies. The production process involves the three...
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Chips R Us Inc. produces gourmet chocolate chip cookies. The production process involves the three separate departments in the following sequential order: blending, baking and packaging. The company uses two cost categories: direct material and conversion costs. In the blending department, all materials are added at the beginning of the blending process and overhead is applied to production at the rate of 40% of direct labour cost. Labour and overhead are incurred uniformly throughout the process. A review of the blending department's inventory cost records provides you with the following information for the month of October: Units Direct Materials Costs Direct Labour Costs WIP, beginning of October (60% complete) 400,000 $127,000 $55,400 Units started in production 1,200,000 Units completed in October 1,100,000 Costs Added for October $273,000 $158.350 Ending work in process is 65% complete as to labour and overhead. Required: Calculate the cost of the units transferred out to the baking department and the value of the ending WIP in the blending department for October under the weighted average method
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