Eco-Eliminator Manufacturing Produces a Chemical Pesticide and Uses Process Costing

question 110

Multiple Choice

Eco-Eliminator Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,41,000 fl.oz.of chemicals were started in production.Of these,32,000 fl.oz.were completed,and 9000 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 throughout the process.The weighted-average method is used. At the end of January,the equivalent unit data for the Mixing Department were as follows:
$$\begin{array} { | l | r | r | r | } \hline \text { UNITS } & & \text { Equivalent Units } & \text { Equivalent Units } \\\hline \text { Units accounted for } & & \text { Direct Materials Costs } & \text { Conversion Costs } \\\hline \text { Completed and transferred } & 32,000 & 32,000 & 32,000 \\\hline \text { Ending work-in-process* } & 9000 & 9000 & \underline { 3600 } \\\hline & \underline { 41,000 } & \underline { 41,000 } & \underline { 35,600 } \\\hline\end{array}$$ * Percent complete for conversion costs: 40%
In addition to the above,the cost per equivalent unit were $1.80 for direct materials and $5.25 for conversion costs.Using this data,calculate the cost of the units that were transferred out of the Mixing Department and into the Refining Department.

• A)$168,000
• B)$110,400
• C)$225,600
• D)$57,600

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Definitions:

Demand Falls

A situation where the quantity demanded of a product decreases, often due to changes in price, income, or preferences.

Costs Of Production

All expenses incurred in the creation of goods or services, including raw materials, labor, and overhead costs.

Increasing Cost Industry

An increasing cost industry is one in which production costs rise as the industry's output increases, often due to scarce resources or increasing input prices.

Profit Maximization

The process by which a firm determines the price and output level that returns the greatest profit.