Organic Sugar Inc.at Ohio has six processing departments for refining sugar-Affination,Carbonatation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from the month of August for the Recovery Department are as follows: The ending Work-in-Process Inventory is 100% and 95% complete with respect to direct materials and conversion costs respectively.How many metric tons of sugar were refined and transferred to the Packaging Department in August?

Question

Organic Sugar Inc.at Ohio has six processing departments for refining sugar-Affination,Carbonatation,Decolorization,Boiling,Recovery,and Packaging.Conversion costs are added evenly throughout each process.Data from the month of August for the Recovery Department are as follows:   The ending Work-in-Process Inventory is 100% and 95% complete with respect to direct materials and conversion costs respectively.How many metric tons of sugar were refined and transferred to the Packaging Department in August?

Quizplus · Accepted Answer

To calculate the metric tons of sugar refined and transferred to the Packaging Department in August, we need to use the following formula:

Units to account for = Units in beginning work-in-process inventory + Units started into production

We can calculate Units to account for as follows:

Units to account for = (100% complete * 10,000 metric tons) + (95% complete * Conversion costs added in August)
Units to account for = (10,000 metric tons) + (95% * $280,000)
Units to account for = (10,000 metric tons) + ($266,000)
Units to account for = 10,000 + 15,000
Units to account for = 25,000 metric tons

Therefore, 25,000 metric tons of sugar were refined and transferred to the Packaging Department in August. The answer option C)15,000 metric tons is the closest one to this answer, so it is the best choice.