Kormic Co. produces Formica countertops in two sequential production departments: Forming and Polishing. The Polishing Department calculated the following costs per equivalent unit (square feet) on its April production cost report:
Transferred-in Direct Materials Conversion Costs
Cost per equivalent unit: .......$2.94.....................$0.60........................$1.16
During April, 140,000 square feet were completed and transferred out of the Polishing Department to Finished Goods Inventory. The countertops were subsequently sold for $12.50 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.
3. What was the gross profit per square foot?
4. What was the total gross profit on the countertops produced in April?