Process costing can be found in which of the following companies(industries)?
| | Coca-Cola. |
| | Royal Dutch Shell Group (petroleum). |
| | Kimberly-Clark (paper products). |
| | Reichhold Chemical (chemicals). |
| | All of these answer choices are correct. |
East Bay Fisheries Inc. processes king salmon for variousdistributors. Two departments are involved — processing andpackaging. Data relating to tons of king salmon processed in theprocessing department during June 2016 are providedbelow:
| Tons of
King Salmon | Percent Completed |
| Materials | Conversion |
| Work-in-process inventory —June 1 |
1,500 |
90 |
80 |
| Work-in-process inventory —June 30 |
2,800 |
60 |
40 |
Started processing
during June |
7,800 | | |
Total equivalent units for conversion under the FIFO method arecalculated to be:
| | 6,560 equivalent units. |
| | 8,180 equivalent units. |
| | 6,420 equivalent units. |
| | 7,140 equivalent units. |
| | 7,320 equivalent units. |
Giddings Pharmaceutical Company is a maker of drugs for highblood pressure and uses a process costing system. The followinginformation pertains to the final department of Giddings'sblockbuster drug called Solcax.
| Beginning work-in-process (40% completed) | 800 | units |
| Transferred-in | 4,000 | units |
| Normal spoilage | 400 | units |
| Abnormal spoilage | 200 | units |
| Good units transferred out | 3,600 | units |
| Ending work-in-process (1/3 completed) | 600 | units |
| Conversion costs in beginning inventory | $2,560 | |
| Current conversion costs | $6,900 | |
Giddings calculates separate costs of spoilage by computing bothnormal and abnormal spoiled units. Normal spoilage costs arereallocated to good units and abnormal spoilage costs are chargedas a loss. The units of Solcax that are spoiled are the result ofdefects not discovered before inspection of finished units.Materials are added at the beginning of the process. Using theweighted-average method, answer the following question:
What are the total conversion costs in ending inventory?
