Help Inc.manufactures phones in a two-department process that involve Assembly and Finishing.The Assembly Department reported the follow data for the past month: The partially complete units at the end of the month were 100 percent complete with respect to materials and 75 percent complete with respect to conversion costs.The cost of a finished unit is ________.
A)$12.84
B)$13.20
C)$15.29
D)$17.20

Question

Help Inc.manufactures phones in a two-department process that involve Assembly and Finishing.The Assembly Department reported the follow data for the past month:   The partially complete units at the end of the month were 100 percent complete with respect to materials and 75 percent complete with respect to conversion costs.The cost of a finished unit is ________.
A)$12.84 
B)$13.20 
C)$15.29 
D)$17.20

Quizplus · Accepted Answer

To calculate the cost of a finished unit, we need to add up the total cost incurred in both departments - Assembly and Finishing. However, since the partially complete units at the end of the month were 75% complete with respect to conversion costs, we need to adjust the conversion costs accordingly.

Here are the steps to calculate the cost of a finished unit:

1. Calculate the equivalent units of production for materials and conversion costs in the Assembly Department:

Equivalent units of production for materials = Units completed and transferred out + Partial units * Percent complete 
= (23,000 units + 0 units) + (100 units * 100%) 
= 23,100 units

Equivalent units of production for conversion costs = Units completed and transferred out + Partial units * Percent complete 
= (23,000 units + 0 units) + (100 units * 75%) 
= 23,075 units

2. Calculate the cost per equivalent unit in the Assembly Department:

Cost per equivalent unit = Total cost in Assembly Department / Equivalent units of production 
= ($300,000 + $40,000) / 23,100 units 
= $13.04 per unit

3. Calculate the cost of a finished unit:

Cost of a finished unit = Cost per equivalent unit in Assembly Department + Cost per equivalent unit in Finishing Department 
= $13.04 + $0.16 
= $13.20

Therefore, the cost of a finished unit is $13.20, which is option B.

Help Incmanufactures Phones in a Two-Department Process That Involve Assembly and and Finishing.The