Coastal Cycles makes three models of electric bicycles: E20, E35, and E60. The models differ by the size of the battery and the qualityof the components. The bicycles are produced in two departments. The Assembly Department purchases components from vendorsand 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 theAssembly Department.Conversion costs in both the Assembly Department and Customization Department are based on the number of units produced. Thereare never any work-in-process inventories. Data for production in November are shown in the following table.TotalE20E35E60Units produced8,2003,4002,9001,900Materials cost$5,884,000$1,700,000$2,204,000$1,980,000Conversion costsAssembly5,231,600585,000CustomizationTotal conversion costs$5,816,600Required:What is the cost per unit transferred to finished goods inventory for each of the three models in November?Cost Per UnitE20Е35Е60

Computation assembly cost per unit.

Answered: Required: What is the cost per unit…

Business

Accounting

Required: What is the cost per unit transferred to finished goods inventory for each of the three models in November?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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

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