Calculating Cost Per Unit Transferred to Finished Goods Inventory

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

Answer:

The cost per unit transferred to finished goods inventory for each model in February is $3.56 for the Commuter, $5.19 for the Sport, and $9.22 for the X-treme.

Explanation:

The cost per unit transferred to finished goods inventory for each of the three models in February can be calculated using the data provided in the table. The cost per unit is determined by allocating the conversion costs based on the number of units processed in each department. Since no work-in-process inventories are maintained, we can simply divide the total conversion costs for each model by the total number of units transferred to finished goods inventory.

Commuter:

Total conversion costs for Assembly and Packaging = $17,800

Total units transferred to finished goods inventory = 5,000

Cost per unit transferred = Total conversion costs / Total units transferred = $17,800 / 5,000 = $3.56 per unit

Sport:

Total conversion costs for Assembly, Detailing, and Packaging = $29,600

Total units transferred to finished goods inventory = 5,700

Cost per unit transferred = Total conversion costs / Total units transferred = $29,600 / 5,700 = $5.19 per unit

X-treme:

Total conversion costs for Assembly, Customization, and Packaging = $35,900

Total units transferred to finished goods inventory = 3,900

Cost per unit transferred = Total conversion costs / Total units transferred = $35,900 / 3,900 = $9.22 per unit

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