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Case 6-20 Effect of Incorrect Costing across Departments-Weighted-Average Method [LO2, LO3, LO4, LO5] Tavia Limited manufactures a plastic gasket that is used in automobile engines.
Case 6-20 Effect of Incorrect Costing across Departments-Weighted-Average Method [LO2, LO3, LO4, LO5] Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through three processing department Mixing, Forming, and Stamping. The company's accountant (who is very inexperienced) has prepared a summary of production and costs for the Forming Department for October, as follows: Consists of cost transferred in, \$15,360; materials cost, \$6,048; and conversion costs, \$16,896. After mulling over the data above, Tavia's president commented, "I can't understand what's happening here. Despite a concentrated effort at cost reduction, our unit cost actually went up in the Forming Department last month. With that kind of performance, year-end bonuses are out of the question for the people in that department." The company uses the weighted-average method in its process costing. The company uses the weighted-average method in its process costing. Required: 1. Calculate the following by preparing a report for the Forming Department for October. (Round Cost per equivalent unit answ 2 decimal places.)
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