Complete the reconditioning of the carts within a budgeted

Reference no: EM133371093

Golf World, Incorporated (GWI) sells products and services for the sport of golf. One of its key business units specializes in the repair and reconditioning of golf carts. GWI enters into contracts with a number of golf clubs throughout the U.S. in which the clubs send their carts to GWI for a complete reconditioning: motor, frame repair where necessary, and replacement of seat covers and canvas tops. The clubs usually will cycle 10-15% of their carts through this process each year. Because GWI's business has been growing steadily, it is very important to complete the reconditioning of the carts within a budgeted time and cost. The firm uses weighted-average process costing to keep track of the costs incurred in the reconditioning process.

GWI's golf cart repair and reconditioning unit has the following information for the month of November, in which 1,290 carts were started for reconditioning:

Beginning WIP: 240 units, 50% complete for materials ($17,500) and 30% complete for conversion ($21,050)

Current costs:

Direct Materials: $200,900

Conversion: $636,600 (conversion costs for GWI usually average about $340 to $410 per unit, based on an average of 1,090 - 1,390 units completed each month)

Ending WIP: 390 units, 30% complete for direct materials and 20% complete for conversion

Reference no: EM133371093

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