Melbourne Cup Manufacturing Company manufactures its product in the cutting department, and adopts a process costing system During February, the beginning work in process in the cutting department was 50 complete as to conversion, and 100 complete as to direct materials The beginning work in process inventory included $12,000 for materials and $3,000 for conversion costs Ending work in process inventory in the cutting department was 40 complete regarding conversion and 100 complete regarding direct material Additional information about the cutting department follows Cutting Dept Units in work in process, beginning 20,000 Units started this period 40,000 Units completed this period 50,000 Units in work in process, ending 10,000 Direct material costs added $42,000 Direct manufacturing labor cost $18,700 Other conversion costs $21,500 Under the weighted average method, calculate the equivalent units for conversion cost category in the Cutting Department (3 marks) Under the weighted average method, calculate the per unit conversion cost (6 marks) Suppose the managers bonus depends on the gross margin generated by the 50,000 units completed and sold in the current period At the end of the period, the manger finds that the gross margin does not look good Sales price for the 50,000 units is fixed What would the manager ask the management accountant to do to help him achieve higher bonus Please provide justification (5 marks)

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Melbourne Cup. Manufacturing Company manufactures its product in the cutting department, and adopts a process costing system. During February, the beginning work in process in

Melbourne Cup. Manufacturing Company manufactures its product in the cutting department, and adopts a process costing system. During February, the beginning work in process in the cutting department was 50% complete as to conversion, and 100% complete as to direct materials. The beginning work-in-process inventory included $12,000 for materials and $3,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete regarding conversion and 100% complete regarding direct material.

Additional information about the cutting department follows:

	Cutting Dept.
Units in work-in-process, beginning	20,000
Units started this period	40,000
Units completed this period	50,000
Units in work-in-process, ending	10,000
Direct material costs added	$42,000
Direct manufacturing labor cost	$18,700
Other conversion costs	$21,500

Under the weighted-average method, calculate the equivalent units for conversion cost category in the Cutting Department. (3 marks)

Under the weighted average method, calculate the per-unit conversion cost. (6 marks)

Suppose the managers bonus depends on the gross margin generated by the 50,000 units completed and sold in the current period. At the end of the period, the manger finds that the gross margin does not look good. Sales price for the 50,000 units is fixed. What would the manager ask the management accountant to do to help him achieve higher bonus? Please provide justification. (5 marks)