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Problem
Oehkle Inc. produces paint in a process in which spoilage occurs continually. Spoilage of 2 percent or fewer of the gallons of raw material placed into production is considered normal. The following operating statistics are available for June 2013:
Beginning WIP Inventory (60% complete as to material; 70% complete as to conversion) 16,000 gallons
Started during june 360,000 gallons
Ending WIP Inventory (40% complete as to material, 20% complete as to conversion) 8,000 gallons
Spoiled 2,800 gallons
a. How many gallons were transferred out?
b. What are the FIFO equivalent units of production for material? For Conversion?
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