Question

State two conditions under which computing equivalent units will make a material difference to reported inventory amounts..

During an early season promotion, a weekend ski pass was priced at $84 plus PST and GST at Blackcomb Mountain, B.C., and at $84 plus GST and PST at Mont Tremblant, Quebec. What is the difference in the total price paid by skiers at the two ski resorts?

Answer 1

In first condition where ski pass was priced at $84 plus PST and GST at Blackcomb Mountain ,B.C. shows that GST on $84 is included.

Where in second condition ski pass was priced $84 plus GST and PST at Mont Tremblant Quebec shows that GST yet to be included in price.

So, price in second condition will rise .

This is a rule of Canadian Govt. that GST must calculated first then PST is shown.