Operation costing, equivalent units. (Chapter Appendix II, CMA, adapted) Gregg Industries manufactures a variety of plastic products, including a series of moulded chairs.

The three models ofmoulded chairs, which are all variations ofthe same design, are Standard

(can be stacked), Deluxe (with arms), and Executive (with arms and padding). The company uses batch manufacturing and has an operation-costing system.

Gregg has an extrusion operation and subsequent operations to form, trim, and finish the chairs. Plastic sheets are produced by the extrusion operation, some of which are sold directly to other manufacturers. During the forming operation, the remaining plastic sheets are moulded into chair seats and the legs are added. The Standard model is sold after this operation. During the trim operation, the arms are added to the Deluxe and Executive models and the chair edges are smoothed. Only the Executive model enters the finish oper¬

ation, where the padding is added. All of the units produced receive the same steps within each operation.

The May production run had a total manufacturing cost of $898,000. The units of pro¬

duction and direct materials costs incurred are as follows:

Units Extrusion Form Trim Finish Produced Materials Materials Materials Materials Plastic sheets 5,500 $ 60,000 $ 0 $ 0 $ 0 Standard model 6,500 72,000 24,000 0 0 Deluxe model 3,500 36,000 12,000 9,000 0 Executive model 2,500 24.000 8.000 6,000 12,000 18.000 $192,000 $44,000 $15,000 mm Manufacturing costs of production assigned during the month ofMay were Extrusion Form Trim Finish Operation Operation Operation Operation Direct manufacturing labour $152,000 $60,000 $30,000 $18,000 Manufacturing overhead 240,000 72,000 39,000 24,000 Required 1. For each product produced by Gregg Industries during May, determine

(a) the unit cost, and

(b) the total cost. Be sure to account for all costs incurred during the month, and support your answer with appropriate calculations.

2. Without considering your answer in requirement 1, assume that 1,500 units ofthe Deluxe model produced during May remained in work in process at the end of the month. These units were 100% complete as to materials costs and 60% complete in the trim operation. Determine the cost ofthe 1,500 units of the Deluxe model in the workin-process inventory at the end ofMay