Question

Luxguard Home Paint Company produces exterior latex paint, which it sells in one-gallon containers. The company has two processing departments-Base Fab and Finishing. White paint, which is used as a base for all the company's paints, is mixed from raw ingredients in the Base Fab Department. Pigments are then added to the basic white paint, the pigmented paint is squirted under pressure into one-gallon containers, and the containers are labeled and packed for shipping in the Finishing Department. Information relating to the company's operations for April follows:
a. Issued raw materials for use in production: Base Fab Department, $851,000; and Finishing Department,$629,000.
b. Incurred direct labor costs: Base Fab Department, $330,000; and Finishing Department,$ 270,000.
c. Applied manufacturing overhead cost: Base Fab Department, $665,000; and Finishing Department, $405,000.
d. Transferred basic white paint from the Base Fab Department to the Finishing Department, $1,850,000.
e. Transferred paint that had been prepared for shipping from the Finishing Department to Finished Goods, $3,200,000.

Prepare a cost reconciliation report for April.

Answer 1

The cost of ending work in process inventories and of units transferred out of the Base Fab Department in April is  $851,00  and $999,000and  $1850,000

The calculation of this question and working of solutions is in tabular form which is attached to this answer.

What is Cost?

The cost is of two types - Variable and Fixed . Variable costs exchange based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. constant costs continue to be the same no matter production output. fixed charges may additionally include hire and rental bills, coverage, and interest payments.

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