Question

Knot Co. has the following activity for their most recent year when 4,000 units were made: Raw Materials: Beginning 40,000.00 Ending 19,000.00 Work in Process: Beginning 90,000.00 Ending 70,000.00 Finished Goods Inventory: Beginning 26,100.00 $ 52,200.00 Ending $ purchases $ Depreciation, building & equipment 20,000.00 Raw material purchases 290,000.00 Insurance on plant 15,000.00 Sales salaries 40,000.00 Repairs & Maintenance, plant 10,000.00 Indirect labor 66.000.00 Direct labor 200,000.00 Administrative expenses 100,000.00 What is the Cost Per Unit? Respond without commas or dollar signs, rounded to two decimal places

Answer 1

Working as follows:

Compute Cost of Goods manufactured:

Direct Material:
Beginning materials inventory	$40,000
Add: Raw material purchases	$290,000
Raw material available for use	$330,000
Less: Ending raw material inventory	($19,000)
Raw material used in production (A)		$311,000
Direct labor (B)		$200,000
Manufacturing overhead/factory overhead:
Depreciation on Building & Equipment	$20,000
Insurance on Plant	$15,000
Repair & Maintenance -plant	$10,000
Indirect labor	$66,000
Total factory overhead (C)		$111,000
Total manufacturing costs (A + B + C)		$622,000
Add: Beginning WIP inventory		$90,000
Total cost of WIP		$712,000
Less: Ending WIP inventory		($70,000)
Cost of goods manufactured		$642,000

______________________________________________________________

Beginning Finished goods inventory	$26,100
Add: Cost of goods manufactured (W.N2)	$642,000
Finished Goods available for sale (A)	$668,100
Units produced (B)	4000
Cost per unit (A/B)	$167.03