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| Taylor Ski Company manufactures snow skis. During the most recent accounting period, the company’s finishing department transferred 4,300 sets of skis to finished goods. At the end of the accounting period, 480 sets of skis were estimated to be 60 percent complete. Total product costs for the finishing department amounted to $344,100. |
| Required: | |
| a. | Determine the cost per equivalent. |
| b.&c. | Determine the cost of the goods transferred out of the finishing department and the cost of the finishing department’s ending work in process inventory. |
| To finished goods-?
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To ending inventory- ? |
|
Expert Answer
| No fo finished units transferred | 4,300 units | |
| Ending inventory units (60% complete) | 480 units | |
| Equivalent units of Ending inventory (480*60%) | 288 units | |
| Cost per equivalent unit | ||
| A | Total no of equivalent units (4,300+288) | 4,588 units |
| Total cost | $344,100 | |
| Cost of equivalent unit ($344,100/4588) | $75 | |
| Cost of Finished goods | ||
| Cost per equivalent unit | $75 | |
| No of units finished and transferred | 4,300 units | |
| Cost of finished goods ($75*4,300) | $322,500 | |
| Cost of Ending inventory | ||
| Cost per equivalent unit | $75 | |
| Equivalent units of Ending inventory (480*60%) | 288 units | |
| Cost of finished goods ($75*288) | $21,600 | |
| Cost of finished goods ($75*4,300) | $322,500 | |
| Cost of finished goods ($75*288) | $21,600 |
