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Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through three processing departments: Mixing, Forming, and Stamping. The company's

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Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through three processing departments: Mixing, Forming, and Stamping. The company's accountant (who is very inexperienced) has prepared a summary of production and costs for the Forming Department for October as follows: Work in process inventory, October 1 (10,200 units materials 100% complete, conversion 7/8 complete) Costs transferred in from the Mixing Department Material added during October (added when processing is 50% complete in the Forming Department) Conversion costs added during October $40,494* 144,726 71,956 201,564 Total departmental costs $458,740 Units completed and transferred to the Stamping $458,740 Department (130,000 units at $3.52877 each) Work in process inventory, October 31 (9,300 units conversion 2/5 complete) $458,740 Total departmental costs assigned Consists of cost transferred in, $14,076, materials cost, $7,344; and conversion costs, $19,074 After mulling over the data above, Tavia's president commented, "1 can't understand what's happening here. Despite a concentrated effort at cost reduction, our unit cost actually went up in the Forming Department last month. With that kind of per

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