Reference no: EM133107030

Rene Alverez knew she was in over her head soon after she took the job. Even so, the opportunity for promotioncomes along rarely and she believed that she would grow into it. Ms. Alverez is the cost accounting specialist assignedto the finishing department of Standard Tool Company. Bill Sawyer, the manager of the finishing department, knowsexactly what he is doing. In each of the three years he has managed the department, the cost per unit of producttransferred out of his Work in Process Inventory account has declined. His ability to control cost is highly valued, andit is widely believed that he will be the successor to the plant manager, who is being promoted to manufacturing vicepresident. One more good year would surely seal the deal for Mr. Sawyer. It was little wonder that Ms. Alverez wasuncomfortable in challenging Mr. Sawyer's estimate of the percentage of completion of the department's endinginventory. He contended that the inventory was 60 percent complete, but she believed that it was only about 40percent complete

After a brief altercation. Ms. Alverez agreed to sign off on Mr. Sawver's estimate. The truth was that although shebelieved she was right, she did not Know how to support her position. Besides. Mr. Sawver was about to be namedplant manager, and she felt it unwise to challenge such an important person

The department had beginning inventory of 5,500 units of product and it started 94,500 units during the period. Ittransferred out 90 000 units during the Deriod. Total transferred-in and production cost for the period was $902,400. This amount included the cost in beginning inventory plus additional costs incurred during the period. The target(standard) cost per unit is $9.45

Compute the equivalent cost per unit, assuming the ending inventory is considered to be 40 percent complete.

Compute the equivalent cost per unit, assuming the ending inventory is considered to be 60 percent complete.