Malcom Industries Manufactures a Silicone Paste Wax That Goes Through

question 35

Essay

Malcom Industries manufactures a silicone paste wax that goes through three processing departments: cracking,blending,and packing.All raw materials are introduced at the start of work in the cracking department,with conversion costs being incurred uniformly in each department.The Work-in-Process T-account for the cracking department for July is:
$$\begin{array}{l}\text { Work-in-Process I wentoy (Cracking Department) }\\\begin{array} { | l | r | } \hline \text { Balance, Juby } 1 ( 36,000 \mathrm { lbs } , 4 / 5 \text { done) } & \$ 63,700 \\\hline \text { Direct materials ( } 280,000 \mathrm { lbs } ) & 397,600 \\\hline \text { Conversion costs } & 189,700 \\\hline \text { Balance, Juby } 31 \text { (45,000 lbs, } 23 \text { done) } & ? ? \\\hline \text { Costs transterred to Blending Dept } & ? ? \\\hline\end{array}\end{array}$$
The beginning balance inventory consists of $43,400 in materials cost.Malcom uses the first-in,first-out (FIFO)method to account for its operations.Required (use 4 decimal places for computations):
(a)What would be the Cracking Department inventory balance on July 31?
(b)What would be the cost transferred to the Blending Dept.in July?

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Definitions:

Direct Financing Lease

A type of lease agreement where the lessor effectively finances the leased asset for the lessee, recognizing interest income over the lease term.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as a financial charge in the income statement over the period of borrowing.

Interest Revenue

Income earned on investments like savings accounts, certificates of deposit, and bonds, typically presented within non-operating income on the income statement.

Current Ratio

A measure of liquidity calculated by dividing a company's current assets by its current liabilities, indicating how well it can cover its short-term obligations.