Hawaii Corporation makes four different models of watches: the Office-Prank, Basic, Sport and Deluxe. They are made in four departments - Assembly, Polishing, Special Finishing and Packaging. The process is as follows: All of the models are started in the Assembly Department, where the materials are assembled. The Office-Prank model is basically done at this point, and needs only to be packaged and then transferred to finished-goods inventory. After assembly, the Basic and Sport models go to the Polishing Department where they are, you guessed it, polished. When that is done, they are ready to be packaged. After packaging, they are moved to finished goods. The Deluxe model uses a different preparation process. After assembly, it moves to the Special Finishing department, then it is packaged and transferred to finished goods. Production data for the most recent month is as follows. Office Prank Basic Sport Deluxe Total Units produced during the month 5,000 10,000 13,000 2,000 $156,000 Direct materials costs $15,000 $90,000 $60,000 $321,000 Departmental Conversion Costs $120,000 69,000 20,000 90,000 Assembly Polishing Special Finishing Packaging Total Conversion $299,000 Cost The company uses normal costing to record departmental costs. The costs of the various departments include ALL costs incurred in those departments. Within each department, the company uses departmental overhead rates to apply overhead within the respective departments. There were no beginning or ending work-in-process inventories in either department. Required: What is the unit cost of each type of product transferred to finished goods inventory during the month? (Hint: if you aren't already convinced that it's easier to use a picture, try first drawing a flow chart which llustrates the physical flow of the different models through the production process. 1. 2. Let's look a bit more closely at the Polishing department. Assume that there were no beginning WIP inventories. At the end of the period, the Polishing Department reported 6,000 units that were 60% complete. NOW what would the unit cost of conversion be in the Polishing Department? NOW What would be the unit costs for the Basic model