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Lindsay Mobility manufactures two versions of e-scooters: L-4 and L-36. Both models go through the same assembly process and are produced in the same
Lindsay Mobility manufactures two versions of e-scooters: L-4 and L-36. Both models go through the same assembly process and are produced in the same plant. The difference between the models is in quality and cost of the parts (direct materials). The following data represent expected operations for the next month: Number of units Parts cost per unit L-4 400 L-36 Total $ 180 100 $ 180 Conversion costs: Direct labor Overhead Total 500 $ 145,500 49,500 $ 195,000 Required: a. Lindsay Mobility uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the L-4 and L-36 models for the upcoming month. b. After attending a seminar on finance and accounting, the marketing director at Lindsay has asked the controller whether the company should use a two-stage system to calculate the product cost of the two models. The controller agrees to do this and to assign direct labor cost based on the number of units produced and overhead cost based on direct materials cost. Compute the cost per unit of the L-4 and L-36 models for the upcoming month using the controller's design. Complete this question by entering your answers in the tabs below.
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