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Larned Recreational builds two models of dune buggies: Sport and Custom. Both models require the same assembly and finishing process and are assembled in the same factory. They differ in the quality and detail of the materials. The following data reflect expected operations for the upcoming year. Number of units Direct materials cost per unit Conversion costs: Direct labor Overhead Total Required A Required B Conversion cost Material cost Total cost Unit cost $ Sport 3,200 $ 400 Required: a. Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. b. The financial team at Larned suggests that a two-stage system be used to compute the product cost of the two models. Their recommendation is to assign direct labor cost based on the number of units and overhead cost based on direct materials cost. Compute the cost per unit of the Sport and Custom models for the upcoming year using the team's recommendation. Complete this question by entering your answers in the tabs below. Sport 0 $ Custom Custom Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. Note: Do not round intermediate calculations. Round "Unit cost" to 2 decimal places. 1,800 $ 1,100 $ 0 $ Total Total 5,000 $ 1,896,000 2,608,000 $ 4,504,000 0 0 0

Larned Recreational builds two models of dune buggies: Sport and Custom. Both models require the same assembly and finishing process and are assembled in the same factory. They differ in the quality and detail of the materials. The following data reflect expected operations for the upcoming year. Number of units Direct materials cost per unit Conversion costs: Direct labor Overhead Total Required A Required B Conversion cost Material cost Total cost Unit cost $ Sport 3,200 $ 400 Required: a. Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. b. The financial team at Larned suggests that a two-stage system be used to compute the product cost of the two models. Their recommendation is to assign direct labor cost based on the number of units and overhead cost based on direct materials cost. Compute the cost per unit of the Sport and Custom models for the upcoming year using the team's recommendation. Complete this question by entering your answers in the tabs below. Sport 0 $ Custom Custom Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. Note: Do not round intermediate calculations. Round "Unit cost" to 2 decimal places. 1,800 $ 1,100 $ 0 $ Total Total 5,000 $ 1,896,000 2,608,000 $ 4,504,000 0 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Larned Recreational builds two models of dune buggies: Sport and Custom. Both models require the same assembly and finishing process and are assembled in the same factory. They differ in the quality and detail of the materials. The following data reflect expected operations for the upcoming year. Number of units Direct materials cost per unit Conversion costs: Direct labor Overhead Total Required A Required B Conversion cost Material cost Total cost Unit cost Sport 3,200 $ 400 $ Required: a. Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. b. The financial team at Larned suggests that a two-stage system be used to compute the product cost of the two models. Their recommendation is to assign direct labor cost based on the number of units and overhead cost based on direct materials cost. Compute the cost per unit of the Sport and Custom models for the upcoming year using the team's recommendation. Complete this question by entering your answers in the tabs below. 0 $ Custom Custom 1,800 $ 1,100 Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. Note: Do not round intermediate calculations. Round "Unit cost" to 2 decimal places. Sport $ 0 $ Total Total 5,000 $ 1,896,000 2,608,000 $ 4,504,000 0 0 0
Transcribed Image Text:Larned Recreational builds two models of dune buggies: Sport and Custom. Both models require the same assembly and finishing process and are assembled in the same factory. They differ in the quality and detail of the materials. The following data reflect expected operations for the upcoming year. Number of units Direct materials cost per unit Conversion costs: Direct labor Overhead Total Required A Required B Conversion cost Material cost Total cost Unit cost Sport 3,200 $ 400 $ Required: a. Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. b. The financial team at Larned suggests that a two-stage system be used to compute the product cost of the two models. Their recommendation is to assign direct labor cost based on the number of units and overhead cost based on direct materials cost. Compute the cost per unit of the Sport and Custom models for the upcoming year using the team's recommendation. Complete this question by entering your answers in the tabs below. 0 $ Custom Custom 1,800 $ 1,100 Larned Recreation uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Sport and Custom models for the upcoming year. Note: Do not round intermediate calculations. Round "Unit cost" to 2 decimal places. Sport $ 0 $ Total Total 5,000 $ 1,896,000 2,608,000 $ 4,504,000 0 0 0
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