Question - Carmen Products makes four models of guitars. All of the models go through the same assembly line but they differ as to the materials used and the degree of finishing. The Basic Model as a low gloss finish and goes immediately to packaging upon completion of assembly. The Super Model and the Premium model go through a Buffering process upon completion of Assembly. They then go to Packaging. The Deluxe Model is the top of the line and goes first to Buffing from the Assembly, and then to Special Polishing, then to Packaging. Carmen uses operation costing and allocates conversion costs based on the number of units processed in each department. What is the cost per unit of each of the completed guitars?
|
Total |
Basic |
Super |
Premium |
Deluxe |
- Units
|
|
3000 |
1800 |
1700 |
250 |
Materials
|
$107,500 |
$40,000 |
$30,000 |
$20,000 |
$17,500 |
| Conversion Costs: |
|
|
|
|
|
| Assembly |
$78,750 |
|
|
|
|
| Buffing |
43,400 |
|
|
|
|
| Special Polish |
15000 |
|
|
|
|
| Packaging |
10650 |
|
|
|
|
| Total Conversion |
$
|
|
|
|