Ferdon Watches, Inc., makes four models of watches, Gag-Gift, Commuter, Sport, and Retirement. Ferdon manufactures the watches in four departments: Assembly, Polishing, Special Finishing, and Packaging. All four models are started in Assembly where all material is assembled. The Gag-Gift is transferred to Packaging, where it is packaged and transferred to finished goods inventory. The Commuter and Sport are assembled, then transferred to Polishing. Once the polishing process is completed, they are transferred to Packaging and then finished goods. The Retirement model is assembled and then transferred to Special Finishing, and then Packaging. When packaged, it is transferred to finished goods. Data for October are shown in the following table. Conversion costs are allocated based on the number of units processed in each department. Materials Conversion costs: Assembly Polishing Special Finishing Packaging Total conversion costs Gag-Gift Commuter Sport Retirement Total $ 460,000 Cost Per Unit $ 195,000 113,600 45,600 156,000 $ 510,200 Gag-Gift (6,800 units) $ 17,000 Commuter (11,800 units) $118,000 Sport (16,600 units) $ 249,000 Required: b. What is the cost per unit transferred to finished goods inventory for each of the four watches in October? (Round "Cost Per Unit" to 2 decimal places.) Retirement (3,800 units) $ 76,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Ferdon Watches, Inc., makes four models of watches, Gag-Gift, Commuter, Sport, and Retirement.Ferdon manufactures the watches in
four departments: Assembly, Polishing, Special Finishing, and Packaging. All four models are started in Assembly where all material is
assembled. The Gag-Gift is transferred to Packaging, where it is packaged and transferred to finished goods inventory. The Commuter
and Sport are assembled, then transferred to Polishing. Once the polishing process is completed, they are transferred to Packaging
and then finished goods. The Retirement model is assembled and then transferred to Special Finishing, and then Packaging. When
packaged, it is transferred to finished goods.
Data for October are shown in the following table. Conversion costs are allocated based on the number of units processed in each
department.
Materials.
Conversion costs:
Assembly
Polishing
Special Finishing
Packaging
Total conversion costs
Gag-Gift
Commuter
Sport
Retirement
Total
$ 460,000
Cost Per Unit
$ 195,000
113,600
45,600
156,000
$ 510,200
Gag-Gift
(6,800 units)
$ 17,000
Commuter
(11,800 units)
$118,000
Sport
(16,600 units)
$ 249,000
Required:
b. What is the cost per unit transferred to finished goods inventory for each of the four watches in October? (Round "Cost Per Unit" to
2 decimal places.)
Retirement
(3,800 units)
$ 76,000
Transcribed Image Text:Ferdon Watches, Inc., makes four models of watches, Gag-Gift, Commuter, Sport, and Retirement.Ferdon manufactures the watches in four departments: Assembly, Polishing, Special Finishing, and Packaging. All four models are started in Assembly where all material is assembled. The Gag-Gift is transferred to Packaging, where it is packaged and transferred to finished goods inventory. The Commuter and Sport are assembled, then transferred to Polishing. Once the polishing process is completed, they are transferred to Packaging and then finished goods. The Retirement model is assembled and then transferred to Special Finishing, and then Packaging. When packaged, it is transferred to finished goods. Data for October are shown in the following table. Conversion costs are allocated based on the number of units processed in each department. Materials. Conversion costs: Assembly Polishing Special Finishing Packaging Total conversion costs Gag-Gift Commuter Sport Retirement Total $ 460,000 Cost Per Unit $ 195,000 113,600 45,600 156,000 $ 510,200 Gag-Gift (6,800 units) $ 17,000 Commuter (11,800 units) $118,000 Sport (16,600 units) $ 249,000 Required: b. What is the cost per unit transferred to finished goods inventory for each of the four watches in October? (Round "Cost Per Unit" to 2 decimal places.) Retirement (3,800 units) $ 76,000
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