Otter Company (OC) manufactures calculators and uses a process costing system The calculators are manufactured in two departments The integrated circuit board is assembled in the IC department and the completed boards are transferred to the Assembly department for completion and packaging The boards from the IC department are transferred to the Assembly department at the start of the process All direct material (100 ) is added in the assembly department at the 20 completion point Conversion costs are added evenly throughout the assembly process During October 2017, OC manufactured and sold 150,000 calculators, generating total cash revenue of $5,250,000 There was no beginning work in process (WIP) in the IC and Assembly departments at the beginning of October 2017 At the end of October 2017, there were 10,000 calculators in the WIP in the Assembly department This WIP was 50 complete with respect to conversion costs There was no end WIP in the IC department at the end of October 2017 The following table summarises the costs incurred in each department in October IC ASSEMBLY Direct Materials $1,280,000 $1,600,000 Direct Labour Overheads $480,000 $387,500 Total $1,760,000 $1,987,500 Required (a) Compute the equivalent units of production for OC in the Assembly department and calculate the costs per calculator for October 2017 using weighted average process costing (Clearly show the costs per equivalent unit to the nearest cent for each cost category) What is the gross profit margin for calculators produced and sold in October 2017 (b) Based on computations in (a), write the journal entries to post record the costs of goods sold and revenue earned in October 2017 OC pays its sales people a fixed monthly salary and an annual bonus based on sales growth Every year a sales budget (incorporating the desired growth rate) is drawn up at the beginning of the year The budgeted sales dollar becomes the target for the year, and achieving this sales dollar target qualifies the team for an annual bonus OC has recently started selling its calculators to the professional market and wants to grow this segment by 15 in the coming year Using your knowledge of organisational architecture, explain the effects such a change (and why) will have and the changes OC needs to implement in order to achieve the growth target in the coming year

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Otter Company (OC) manufactures calculators and uses a process costing system. The calculators are manufactured in two departments. The integrated circuit board is assembled in

Otter Company (“OC”) manufactures calculators and uses a process costing system. The calculators are manufactured in two departments. The integrated circuit board is assembled in the IC department and the completed boards are transferred to the Assembly department for completion and packaging. The boards from the IC department are transferred to the Assembly department at the start of the process. All direct material (100%) is added in the assembly department at the 20% completion point. Conversion costs are added evenly throughout the assembly process. During October 2017, OC manufactured and sold 150,000 calculators, generating total cash revenue of $5,250,000.

There was no beginning work-in-process (WIP) in the IC and Assembly departments at the beginning of October 2017. At the end of October 2017, there were 10,000 calculators in the WIP in the Assembly department. This WIP was 50% complete with respect to conversion costs. There was no end WIP in the IC department at the end of October 2017. The following table summarises the costs incurred in each department in October:

	IC	ASSEMBLY
Direct Materials	$1,280,000	$1,600,000
Direct Labour & Overheads	$480,000	$387,500
Total	$1,760,000	$1,987,500

Required:

(a) Compute the equivalent units of production for OC in the Assembly department and calculate the costs per calculator for October 2017 using weighted average process costing (Clearly show the costs per equivalent unit to the nearest cent for each cost category). What is the gross profit margin for calculators produced and sold in October 2017?
(b) Based on computations in (a), write the journal entries to post/record the costs of goods sold and revenue earned in October 2017.
OC pays its sales people a fixed monthly salary and an annual bonus based on sales growth. Every year a sales budget (incorporating the desired growth rate) is drawn up at the beginning of the year. The budgeted sales dollar becomes the target for the year, and achieving this sales dollar target qualifies the team for an annual bonus. OC has recently started selling its calculators to the professional market and wants to grow this segment by 15% in the coming year. Using your knowledge of organisational architecture, explain the effects such a change (and why) will have and the changes OC needs to implement in order to achieve the growth target in the coming year.