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 Sport 3,200 $ 400 Custom Conversion cost Material cost Total cost Unit cost 1,800 $ 1,100 Custom 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. Total 5,000 $ 1,968,000 2,608,000 $4,576,000 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 Total
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 Sport 3,200 $ 400 Custom Conversion cost Material cost Total cost Unit cost 1,800 $ 1,100 Custom 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. Total 5,000 $ 1,968,000 2,608,000 $4,576,000 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 Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Se.125.
Transcribed Image Text:Required A Required 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.
Note: Do not round intermediate calculations. Round "Unit cost" to 2 decimal places.
Conversion cost
Direct labor
Overhead
Material cost
Total cost
Unit cost
Sport
Custom
Total
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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
Sport
3,200
$ 400
Custom
Conversion cost
Material cost
Total cost
Unit cost
1,800
$ 1,100
Custom
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 the upcoming year using the team's recommendation.
Complete this question by entering your answers in the tabs below.
Total
5,000
$ 1,968,000
2,608,000
$ 4,576,000
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
Total
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