Time Tells makes children’s storybooks in a continuous run. It changes plates while the large machines are running, losing roughly 100 copies in the changeover process. This has long ago been determined to be the cheapest way to run the large- scale presses. All children’s books are 32 pages with end matter bringing the page count to 40 pages per book. They are bound with a hard cover. The entire process is automated, with finished good books coming out at the end of the line. The plant runs 24 hours a day, seven days a week. Because the plant operates continuously, there are always books in process at the end of the month. For July, the company incurred $6,573,000 in materials costs and $4,861,800 in conversion costs. There were 2,000 units in beginning inventory, and 2,628,000 new units were started during the month. Ending inventory consisted of 4,000 units, materials 80% done, and conversion 50% done.

REQUIRED:

a. Calculate the physical units for materials and conversion for the month.

b. Calculate the equivalent units for materials and conversion for the month.

c. Develop a cost per equivalent unit for materials and conversion.

d. Charge materials and conversion costs to finished goods and work- in- process using equivalent units as the basis.

e. Verify that all of the costs you had to account for have been accounted for.

f. What is the cost per good unit produced?