Required: What is the cost per unit transferred to finished goods inventory for each of the three models in November?
Required: What is the cost per unit transferred to finished goods inventory for each of the three models in November?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Coastal Cycles makes three models of electric bicycles: E20, E35, and E60. The models differ by the size of the battery and the quality
of the components. The bicycles are produced in two departments. The Assembly Department purchases components from vendors
and assembles them into bicycles. The models E20 and E35 are complete and ready for sale after completing the assembly process.
The model E60 undergoes further process in Customization Department, which is actually just a small area in the same building as the
Assembly Department.
Conversion costs in both the Assembly Department and Customization Department are based on the number of units produced. There
are never any work-in-process inventories. Data for production in November are shown in the following table.
Total
E20
E35
E60
Units produced
8,200
3,400
2,900
1,900
Materials cost
$5,884,000
$1,700,000
$2,204,000
$1,980,000
Conversion costs
Assembly
5,231,600
585,000
Customization
Total conversion costs
$5,816,600
Required:
What is the cost per unit transferred to finished goods inventory for each of the three models in November?
Cost Per Unit
E20
Е35
Е60](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d9d2769-642e-4766-9ef4-6b4ef452117b%2F71e4de33-7c45-48e9-9e23-84fe50a77cb9%2Fehhtp7s_processed.png&w=3840&q=75)
Transcribed Image Text:Coastal Cycles makes three models of electric bicycles: E20, E35, and E60. The models differ by the size of the battery and the quality
of the components. The bicycles are produced in two departments. The Assembly Department purchases components from vendors
and assembles them into bicycles. The models E20 and E35 are complete and ready for sale after completing the assembly process.
The model E60 undergoes further process in Customization Department, which is actually just a small area in the same building as the
Assembly Department.
Conversion costs in both the Assembly Department and Customization Department are based on the number of units produced. There
are never any work-in-process inventories. Data for production in November are shown in the following table.
Total
E20
E35
E60
Units produced
8,200
3,400
2,900
1,900
Materials cost
$5,884,000
$1,700,000
$2,204,000
$1,980,000
Conversion costs
Assembly
5,231,600
585,000
Customization
Total conversion costs
$5,816,600
Required:
What is the cost per unit transferred to finished goods inventory for each of the three models in November?
Cost Per Unit
E20
Е35
Е60
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