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Voyageur De Rivière (VR) Manufactures White-Water Kayaks

Question 18

Short Answer

Voyageur de Rivière (VR) manufactures white-water kayaks. Information about VR's kayak production includes the following:
a. VR produced 2,000 kayaks this year.
b. During the normal course of production, VR experiences wastage of €80,000
c. This year, VR experienced abnormal wastage of €40,000 in addition to normal wastage.
d. Wood, glue, resin and other materials total €800 per kayak.
e. Overhead and direct labor (conversion costs) total €700 per kayak.
f. Storage costs are €100 per kayak per year.
g. Costs associated with selling each kayak total €50.
h. Appraised fair market value of each kayak at the end of the year is €1,550
Determine the cost of inventory .

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