Question

Coastal Cycles makes three models of electric bicycles: E20, E35, and E60. The models differ by the size of the battery and the quality of the components. The bicycles are produced in two departments. The Assembly Department purchases components from vendors and assembles them into bicycles. The models E20 and E35 are complete and ready for sale after completing the assembly process. The model E60 undergoes further process in Customization Department, which is actually just a small area in the same building as the Assembly Department Conversion costs in both the Assembly Department and Customization Department are based on the number of units produced. There are never any work-in-process inventories. Data for production in November are shown in the following table. ats eBook ferences Total 7,000 $4,900,000 E20 3,000 $1,500,000 E35 2,500 $1,900,000 Еве 1,500 $1,500,000 Units produced Materials cost Conversion costs Assembly Customization Total conversion costs 4,410,000 525,000 $4,935,000 Required: What is the cost per unit transferred to finished goods inventory for each of the three models in November? Cost Per Unit E20 E35

Answer 1

1)

E20	E35	E60
Materials cost	1,500,000	1,900,000	1,500,000
Conversion cost:
Assembly	1,890,000 [ 4,410,000*3000/7000 ]	1,575,000 [ 4,410,000*2500/7000]	945,000 [ 4,410,000*1500/7000 ]
Customization			525,000
Total cost	3,390,000	3,475,000	2,970,000
(/) Units produced	3000	2500	1500
Cost per unit	1130	1390	1980

2)

	Gag-Gift	Commuter	Sport	Retirement
Materials	15,000	90,000	156,000	60,000
Conversion cost allocation :
Assembly [ ( 5000 : 10000 : 13000 : 2000 ) Total units - 30000 ]	20,000 [ 120000*5000/30000 ]	40,000 [ 120000*1000/30000 ]	52,000 [ 120000*13000/30000 ]	8,000 [ 120000*2000/30000 ]
Polishing [ ( 0 : 10000 : 13000 : 0 ) Total units - 23000 ]	0	30,000 [ 69000*10000/23000 ]	39000 [ 156000*13000/23000]	0
Special furnishing [ ( 0 : 0 : 0 : 2000 ) Total units - 2000 ]	0	0	0	20000
Packaging [ ( 5000 : 10000 : 13000 : 2000 ) Total units - 30000 ]	15000 [ 90,000*5000/30000 ]	30,000 [ 90,000*10000/30000 ]	39,000 [ 90,000*13000/30000 ]	6000 [ 90,000*2000/30000 ]
Total cost	50000	190,000	286000	94000
(/) Number of units produced	5000	10000	13000	2000
Cost per unit	10	19	22	47.00

AS PER CHEGG GUDELINES ONLY ONE ANSWER TO BE SOLVED ;

I DID BOTH ,IF ANY DOUBTS PLEASE MENTION IN COMMNET

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