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Johnson, Inc. are as follows: ending work in process, 8,000 units; units started, 45,000. Beginning work in process contains 5,000 units with the following costs: $4,320 for materials, $2,830 for conversion costs. Additional costs incurred during the period are $52,800 for materials, and $53,750 for conversion costs. Assume Johnson adds all materials at the beginning of the process, and incurs conversion costs uniformly throughout the production process.
Question 1: (T of F) If ending work in process is 75% complete with respect to conversion costs, then Johnson transfers 44,000 units to the next department.
If this sale is made, $2 per unit in variable selling and administrative costs would be saved. What is lowest transfer price the Cargo Division should accept?
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