QUESTION III. 20 MARKS The Chang Manufacturing Company makes wood-finishing stain and uses the FIFO

QUESTION III. 20 MARKS The Chang Manufacturing Company makes wood-finishing stain and uses the FIFO method of process costing for its stain manufacturing activity. The production of stain begins with the blending of various chemicals and ends with the canning of the stain. Canning occurs when the mixture reaches the 90% stage of completion. After canning, the cans are transferred to the shipping department. Here the cans are crated and shipped to various customers. Conversion costs are added uniformly throughout the process. The following are the actual production data for the canning department for April: April Production Costs Work in Process, April 1: Direct materials- chemicals $ 72,000 Direct labour 18,000 Applied overhead 5,000 Costs added in April: Direct materials-chemicals $336,000 Direct materials- cans 10,000 Direct labour 425,500 Applied overhead 115,000 Units for April: Work in process inventory, April 1 (25% complete) 8,000 litres Transferred to shipping department during April 40,000 litres Started during April 42,000 litres Work in process inventory, April 30 (80% complete) 10,000 litresQuestion is: Compute the equivalent units in April for each of materials-cans, material-chemicals and conversion costs

 

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