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, Detalling, 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 transferre to finished goods Inventory. The Sport is then transferred to Detalling. 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 costs Commuter Sport X-Treme Total $ 3,718,000 Cost Per Unit $ 2,675,000 427,500 560,000 367,500 $ 4,030,000 Commuter (1,200 units) $ 1,456,000 Sport (900 units) $ 1,366,000 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) $ 896,000
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, Detalling, 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 transferre to finished goods Inventory. The Sport is then transferred to Detalling. 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 costs Commuter Sport X-Treme Total $ 3,718,000 Cost Per Unit $ 2,675,000 427,500 560,000 367,500 $ 4,030,000 Commuter (1,200 units) $ 1,456,000 Sport (900 units) $ 1,366,000 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) $ 896,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, Detalling, 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 Detalling. 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 costs
Commuter
Sport
X-Treme
Total
$ 3,718,000
Cost Per Unit
$ 2,675,000
427,500
560,000
367,500
$ 4,030,000
Commuter
(1,200 units)
$ 1,456,000
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.
Sport
X-Treme
(900 units) (400 units)
$ 1,366,000 $ 896,000
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