Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2 . What is the cost per equivalent unit of material and conversion? ( Show calculation ) Laredo Leather Company manufactures high - quality leather

2. What is the cost per equivalent unit of material and conversion? (Show calculation)Laredo Leather Company manufactures high-quality leather goods. The companys profits have declined during the past nine months. In an attempt to isolate the causes of poor profit performance, management is investigating the manufacturing operations. of each of its products.
One of the companys main products is leather belts. The belts are produced in a single, continuous process in the Dallas Plant. During the process, leather strips are sewn, punched, and dyed. the belts then enter a final finishing stage to conclude the process. Labor and overhead are applied continuously during the manufacturing process. All materials, leather strips, and buckles are introduced at the beginning of the process. The firm uses the weighted-average method to calculate its unit cost.
The leather belts produced at the Dallas Plant are sold wholesale for $9.95 each. Management wants to compare the current manufacturing costs per unit with the market prices for leather belts. Top management has asked the Dallas plant controller to submit data on the cost of the manufacturing the leather belts for the month of October. These cost data will be used to determine whether modifications in the production process should be initiated or whether an increase in the selling price of the belts is justified. The cost per belt used for planning and control is $5.25.
The work-in-process inventory consisted of 400 partially completed units on October 1. The belts were 25 percent complete as to conversion. The cost included in the inventory on October 1 were as follows:
Leather strips............................................................................................................................................ $ 990
Buckles ...................................................................................................................................................... $260
Conversion costs ..................................................................................................................................... $300
Total ...........................................................................................................................................................$1,550
During October, 7,600 leather strips were placed into production. A total of 6,250 leather belts were completed. The work-in-process inventory on October 31 consisted of 1,750 belts, which were 50 percent complete as to conversion.
The costs charged to production during October were as follows:
Leather strips............................................................................................................................................ $ 19,900
Buckles ...................................................................................................................................................... $ 5,250
Conversion costs ..................................................................................................................................... $20,700 Total ...........................................................................................................................................................$45,850

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: By David N. Ricchiute

6th Edition

0324024029, 9780324024029

More Books

Students also viewed these Accounting questions

Question

I am paid fairly for the work I do.

Answered: 1 week ago