Gallagher Counter Co. produces quartz countertops in two sequential production departments:
Forming and Polishing. The Polishing Department calculated the following costs per equivalent unit (square feet) on its May production cost report:
____________________Transferred-in ___________Direct Materials _______Conversion Costs
Cost per equivalent unit:........$2.94..................................$0.90...................................$1.46
During May, 135,000 square feet were completed and transferred out of the Polishing Department to Finished Goods Inventory. The countertops were subsequently sold for $13.50 per square foot.
1. What was the cost per square foot of the finished product?
2. Did most of the production cost occur in the Forming Department or in the Polishing Department? Explain how you can tell where the most production cost occurred.
3. What was the gross profit per square foot?
4. What was the total gross profit on the countertops produced in May?