Saasa Chemicals

Chapter 6

Exercises

6-1. Zero beginning inventory, materials introduced in middle of process.  Saasa Chemicals has a Mixing Department and a Refining Department. Its process-costing system in the Mixing Department has two direct materials cost categories (Chemical P and Chemical Q) and one conversion costs pool. The following data pertain to the Mixing Department for July 2008:

  Chemical P is introduced at the start of operations in the Mixing Department, and chemical Q is added when the product is three-fourths completed in the Mixing Department. Conversion costs are added evenly during the process. The ending work in process in the Mixing Department is two-thirds complete.

Required:

1. Compute the equivalent units in the Mixing Department for July 2008 for each cost category.
2. Compute (a) the cost of goods completed and transferred to the Refining Department during July and (b) the cost of work in process as of July 31, 2008.

6-2. Weighted average method.  Consider the following data for the Satellite Assembly Division of Aerospace:

The Satellite Assembly Division uses the weighted average method of process costing.

Show physical units; compute the equivalent units for direct materials and conversion costs. Calculate cost per equivalent unit for direct materials and conversion costs, summarize total costs to account for and assign total costs to units completed and transferred out and to units in ending work in process.