Find or determine the equivalent cost per unit

Assignment Help Managerial Accounting

Reference no: EM132639394

Chrome File Edit View History Bookmarks People Tab Window Help M MHE Reader playeriuimheducatiomcom Rene‘ Alverez knew she was in over her head soon after she took the job. Even so, the opportunity for promotion comes along rarely and she believed that she would grow into it. Ms. Alverez is the cost accounting specialist assigned to the ?nishing department of Standard Tool Company. Bill Sawyer. the manager of the ?nishing department, knows exactly what he is doing. In each of the three years he has managed the department, the cost per unit of product transferred out of his Work in Process Inventory account has declined. His ability to control cost is highly valued, and it is widely believed that he will be the successor to the plant manager, who is being promoted to manufacturing vice president. One more good year would surely seal the deal for Mr. Sawyer. It was little wonder that Ms. Alverez was uncomfortable in challenging Mr. Sawyer's estimate of the percentage of completion of the department's ending inventory. He contended that the inventory was 60 percent complete, but she believed that it was only about 40 percent complete. Alter a brief altercation, Ms. Alverez agreed to sign off on Mr. Sawyer‘s estimate. The truth was that although she believed she was right, she did not know how to support her position. Besides, Mr. Sawyer was about to be named plant 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. It transferred out 90,000 units during the period.

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.

Required :

Question 1: Determine the equivalent cost per unit, assuming that the ending inventory is considered to be 40 percent complete.

Question 2: Determine the equivalent cost per unit, assuming that the ending inventory is considered to be 60 percent complete.

Question 3: Comment on Mr. Sawyer's motives for establishing the percentage of completion at 60 percent rather than 40 percent

Reference no: EM132639394

Questions Cloud

Compare different aspects of the companies : If nothing has changed, compare different aspects of the companies. Is one stronger or weaker in an area than the other?

Determine net income applying the accrual accounting : Mr. Pitt's 2018 cash basis net income (including depreciation expense) is $26,000. Determine net income applying the accrual accounting model.

Present a public health problem solving project to peers : Create a public health problem solving project. Present a public health problem solving project to peers. Identify an issue with a public health policy.

Discuss the environmental and sustainability factors : Discuss the environmental and sustainability factors which impact on and influence the material choices for a construction project

Find or determine the equivalent cost per unit : Chrome File Edit View History Bookmarks, Determine the equivalent cost per unit, assuming that the ending inventory is considered to be 40 percent complete.

Legal issues affect everyone and everything : Legal issues affect everyone and everything, as we are part of a "Sue Happy" society.

Review the five limitations of barter : You have recently been appointed the supreme ruler of a country called Bartopia. The country has always used the barter system until now

Name two office characters who are more motivated : Maybe more money is not the option, there are people out there that just want to be recognized more or be able to be put into a training program for management

How do calculate the cost per equivalent unit of production : Solve the costs per equivalent unit of production for the forming department. Fields Company has two manufacturing departments, forming and painting.

User Account

All Pages