LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2014, the first department, Mixing, had no beginning inventory. During January, 40,000 fl. oz. of chemicals were started in production. Of these, 32,000 fl. oz. were completed and 8,000 fl. oz. remained in process. In the Mixing Department, all direct materials are added at the beginning of the production process and conversion costs are applied evenly through the process. At the end of January, the equivalent unit data for the Mixing Department were as follows: In addition to the above, the costs per equivalent unit were $5.50 for direct materials and $3.60 for conversion costs. Using this data, calculate the full cost of the ending balance in the Mixing Department.
A)$35,600
B)$48,000
C)$61,280
D)$222,400

Question

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2014, the first department, Mixing, had no beginning inventory. During January, 40,000 fl. oz. of chemicals were started in production. Of these, 32,000 fl. oz. were completed and 8,000 fl. oz. remained in process. In the Mixing Department, all direct materials are added at the beginning of the production process and conversion costs are applied evenly through the process. At the end of January, the equivalent unit data for the Mixing Department were as follows:  In addition to the above, the costs per equivalent unit were $5.50 for direct materials and $3.60 for conversion costs. Using this data, calculate the full cost of the ending balance in the Mixing Department.
A)$35,600 
B)$48,000 
C)$61,280 
D)$222,400

Quizplus · Accepted Answer

To calculate the full cost of the ending balance in the Mixing Department, we need to use the equivalent unit data and the costs per equivalent unit given in the question.

The equivalent units are:

- Direct materials: 4,000 oz. completed + (8,000 oz. × 80% completion) = 10,400 oz.
- Conversion costs: 4,000 oz. completed + (8,000 oz. × 60% completion) = 8,800 oz.

Using the costs per equivalent unit:

- Direct materials cost = 10,400 oz. × $5.50 per oz. = $57,200
- Conversion costs = 8,800 oz. × $3.60 per oz. = $31,680

Therefore, the full cost of the ending balance in the Mixing Department is:

$57,200 + $31,680 = $88,880

The correct answer choice is C.

LDR Manufacturing Produces a Pesticide Chemical and Uses Process Costing