Week2 P3-7 Doover Company



Week2 P3-7 Doover Company

Doover Company produces organic honey, which it sells to health food stores and restaurants. The company owns thousands of beehives. No direct materials other than honey are used. The production operation is a simple one. Impure honey is added at the beginning of the process and flows through a series of filters, leading to a pure finished product. Costs of labor and overhead are incurred uniformly throughout the filtering process. Production data for April and May follow.

April May
Beginning work in process inventory
Units(litres) 7,100 12,400
Direct materials $2,480 ?*
Conversion cost $5,110 ?*
Production during the period:
Units started(litres) 288,000 310,000
Direct materials $100,800 $117,800
Conversion costs $251,550 $277,281
Ending work in process inventory
Units(litres) 12,400 16,900

*from calculations at end of April
The beginning work in process inventory for April was 80 percent complete for conversion costs, and ending work in process inventory was 20 percent complete. The ending work in process inventory for May was 30 percent complete for conversion costs. Assume no loss from spoilage or evaporation.
1. Using the FIFO method, prepare a process cost report for April.2. From the information in the process cost report, identify the amount that should be transferred out of the Work in Process Inventory account, and state where those dollars should be transferred.3. Repeat requirements 1 and 2 forMay


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