Exercise 8-55 (Algo) Operations Costing (LO 8-8) Devereaux Cycles makes three models of scooter: Commuter, Sport, and X-treme. The scooters are produced in four departments: Assembly, Detailing, Customization, and Packaging. All three models are started in Assembly, where all materials are assembled. The Commuter is then sent to Packaging, where it is packaged and transferred to finished goods Inventory. The Sport is then transferred to Detailing. Once the detailing process is completed, the Sport models are transferred to Packaging and then finished goods. The X- Treme model is assembled and then transferred to Customization, and then Packaging. When packaged, it is transferred to finished goods. Data for February are shown in the following table, Conversion costs are allocated based on the number of units processed in each department. No work-in-process inventories are maintained in any department. Materials Conversion costs Assembly Detailing. Customization Packaging Total conversion costo Commuter Sport X-Treme Total $ 3,730,000 Cost Per Unit $ 2,675,000 427,500 564,000 367,500 $ 4,034,000 Commuter (1,200 units) $ 1,460,000 Required: b. What is the cost per unit transferred to finished goods inventory for each of the three models in February? Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. X-Treme Sport (900 units) (400 units) $1,370,000 $ 900,000
Exercise 8-55 (Algo) Operations Costing (LO 8-8) Devereaux Cycles makes three models of scooter: Commuter, Sport, and X-treme. The scooters are produced in four departments: Assembly, Detailing, Customization, and Packaging. All three models are started in Assembly, where all materials are assembled. The Commuter is then sent to Packaging, where it is packaged and transferred to finished goods Inventory. The Sport is then transferred to Detailing. Once the detailing process is completed, the Sport models are transferred to Packaging and then finished goods. The X- Treme model is assembled and then transferred to Customization, and then Packaging. When packaged, it is transferred to finished goods. Data for February are shown in the following table, Conversion costs are allocated based on the number of units processed in each department. No work-in-process inventories are maintained in any department. Materials Conversion costs Assembly Detailing. Customization Packaging Total conversion costo Commuter Sport X-Treme Total $ 3,730,000 Cost Per Unit $ 2,675,000 427,500 564,000 367,500 $ 4,034,000 Commuter (1,200 units) $ 1,460,000 Required: b. What is the cost per unit transferred to finished goods inventory for each of the three models in February? Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. X-Treme Sport (900 units) (400 units) $1,370,000 $ 900,000
Chapter1: Financial Statements And Business Decisions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Exercise 8-55 (Algo) Operations Costing (LO 8-8)
Devereaux Cycles makes three models of scooter: Commuter, Sport, and X-treme. The scooters are produced in four departments:
Assembly, Detailing, Customization, and Packaging. All three models are started in Assembly, where all materials are assembled. The
Commuter is then sent to Packaging, where it is packaged and transferred to finished goods Inventory. The Sport is then transferred to
Detailing. Once the detailling process is completed, the Sport models are transferred to Packaging and then finished goods. The X-
Treme model is assembled and then transferred to Customization, and then Packaging. When packaged, it is transferred to finished
goods.
Data for February are shown in the following table. Conversion costs are allocated based on the number of units processed in each
department. No work-in-process inventories are maintained in any department.
Materials
Conversion costa
Assembly
Detailing
Customization
Packaging
Total conversion costs
Commuter
Sport
X-Treme
Total
$ 3,730,000
Cost Per Unit
$ 2,675,000
427,500
564,000
367,500
$4,034,000
Commuter
(1,200 units)
$ 1,460,000
Sport
(900 units)
$ 1,370,000
Required:
b. What is the cost per unit transferred to finished goods inventory for each of the three models in February?
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar.
X-Treme
(400 units)
$ 900,000
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