S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company’s Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which information is available:
SL1 SL2 Total
Number assembled 1,850 2,350 4,200
Materials cost per tractor $ 1,450 $ 1,950
Other costs:
Direct labor $ 1,750,000
Supplies 590,000
Other overhead 3,960,000
Required: S. Lee Enterprises uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in November.
of each model assembled in November.
SL1 | SL2 | Total | |
Operation Cost | |||
Materials Cost | |||
Total Cost | |||
Number of Units | |||
Unit Cost |
SL1 | SL2 | Total | |
Operation Cost | $2,775,000 | $3,525,000 | $6,300,000 |
Materials Cost | $2,682,500 | $4,582,500 | $7,265,000 |
Total Cost | $5,457,500 | $8,107,500 | $13,565,000 |
Number of Units | 1,850 | 2,350 | 4,200 |
Unit Cost | 2,950 | 3,450 | 6,400 |
Working notes:
Total conversion cost ($1,750,000 + $590,000 + $3,960,000) = $6,300,000
Divided by Total units assembled = 4,200
Conversion cost per unit = 1,500
Conversion cost allocated:
SL1 = 1,850 * 1,500 = $2,775,000
SL2 = 2,350 * 1,500 = $3,525,000
Material costs:
SL1 = 1,850 * 1,450 = $2,682,500
SL2 = 2,350 * 1,950 = $4,582,500
S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both...
S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company’s Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which information is available: SL1 SL2 Total Number assembled 1,450 1,950 3,400 Materials cost per tractor $ 1,900 $ 2,400 Other costs: Direct labor $ 2,200,000 Supplies 680,000 Other...
S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company’s Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which information is available: SL1 SL2 Total Number assembled 1,650 2,150 3,800 Materials cost per tractor $ 1,250 $ 1,750 Other costs: Direct labor $ 1,550,000 Supplies 550,000 Other...
S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company’s Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which information is available: SL1 SL2 Total Number assembled 2,000 2,500 4,500 Materials cost per tractor $ 1,600 $ 2,100 Other costs: Direct labor $ 1,900,000 Supplies 620,000 Other...
S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company's Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which Information is available: SL1 SL2 1,200 1,700 $1,650 $2,15€ Total 2,900 Number assembled Materials cost per tractor other costs: Direct labor Supplies other overhead $1,950,000 630,000 2,205,000 Required:...
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