Proteger Company manufactures insect repellant lotion. TheMixing Department, the first process department, mixes thechemicals...Proteger...

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Accounting

Proteger Company manufactures insect repellant lotion. TheMixing Department, the first process department, mixes thechemicals required for the repellant. The following data are forthe current year:
Work in process, January 1 —
Gallons started 900,000
Gallons transferred out 756,000
Direct materials cost $900,000
Direct labor cost $2,000,000
Overhead applied $1,571,200
Direct materials are added at the beginning of the process.Ending inventory is 95 percent complete with respect to directlabor and overhead. The cost of goods transferred out for the yearis:
a.$3,780,000
b.$3,571,200
c.$3,024,000
d.$4,471,200

Answer & Explanation Solved by verified expert

3.7 Ratings (579 Votes)

Correct Answer a 3780000 Calculations Units Reconciliation of Units A Opening WIP 0 B Introduced 900000 CAB TOTAL 900000 D Transferred 756000 ECD Closing WIP 144000 Statement See Answer

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In: AccountingProteger Company manufactures insect repellant lotion. TheMixing Department, the first process department, mixes thechemicals...Proteger Company manufactures insect repellant lotion. TheMixing Department, the first process department, mixes thechemicals required for the repellant. The following data are forthe current year:Work in process, January 1—Gallons started900,000Gallons transferred out756,000Direct materials cost$900,000Direct labor cost$2,000,000Overhead applied$1,571,200Direct materials are added at the beginning of the process.Ending inventory is 95 percent complete with respect to directlabor and overhead. The cost of goods transferred out for the yearis:a.$3,780,000b.$3,571,200c.$3,024,000d.$4,471,200

Work in process, January 1		—
Gallons started		900,000
Gallons transferred out		756,000
Direct materials cost		$900,000
Direct labor cost		$2,000,000
Overhead applied		$1,571,200