Grudy Woodworkers has been a key supplier for many lumber companies in the region, as its known for great quality and value. Its main product, a staircase spindle, goes first through the cutting department, where it is shaped, and then through the finishing department, where each spindle is sanded and buffed. No stain is used here; the natural wood tone comes through in this process. Once complete in the finishing department, the units are ready for sale. The following information relates to the finishing process in October.

		Units		Transferred-In		DM		Conversion Costs
Units in beginning WIP Inventory		300
Beginning WIP Inventory degree of completion				100%		0%		40%
Costs in beginning WIP Inventory				$894				$900
New units started		7,500
Costs added to WIP Inventory this period				$16,500		$2,880		$9,516
Units completed		7,200
Units in ending WIP Inventory		600
Ending WIP Inventory degree of completion				100%		0%		40%

Grudy uses the FIFO method of process costing.

Required

Determine equivalent units for transferred-in costs, DM, and conversion costs for the finishing department in October by completing Steps 1 and 2 of the template.

Determine Grudys cost per equivalent unit for all three cost categories and assign costs to units completed and to units in ending WIP InventoryFinishing by completing Steps 35 of the template.

What is the purpose of completing these calculations? What is the key output from this work? Explain.