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The department had beginning inventory of 5500 units of product and it started 94500 units during the period. It transferred out 90000 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 this period. The target (standard) cost per unit is $9.45
Problem 1: Find the equivalent cost per unit, assuming the ending inventory is considered to be 40 percent complete. Problem 2: Find the equivalent cost per unit, assuming the ending inventory is considered to be 60 percent complete.
Problem 3: What are Mr. Sawyer's motives for establishing the percentage of completion at 60 percent rather than 40 percent.
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