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Sunflower Seed Producers Manufactures Cooking Oil and Other Products Made

Question 121

Essay

Sunflower Seed Producers manufactures cooking oil and other products made from sunflower seeds. All direct materials are added at the beginning of the production process. Data for the direct materials used in the manufacture of cooking oil for the month of December is listed below:
Production data:
Beginning work in process 25,000 units
Units started during the period 50,000
Completed and transferred out 67,500
Manufacturing costs:
Beginning work in process (direct materials)$35,000
Direct material used 75,000
a)Under the FIFO method, how many units were started and completed with respect to direct materials during the month?
b)Under the FIFO method, what is the cost of the direct materials in ending work in process at the end of the month?
c)Under the FIFO method, what is the amount of direct materials cost transferred out this period?
d)Calculate the direct materials cost per equivalent unit under the weighted average method.
e)Did the purchase price of direct materials increase or decrease this period compared to last period? Explain.

Correct Answer:

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a)Units in ending WIP = 7,500 (25,000 + ...

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