The final processing Notes

  • The final processing department in Mary’s production facility began the year with no work in process inventories.

    http://assignment.store/the-final-processing-department-in-marys-production-facility-began-the-year-with-no-work-in-process-inventories/\n\nThe final processing department in Mary’s production facility began the year with no work in process\n\ninventories. During the year, 210,000 units were transferred in from the prior processing department\n\nand 200,000 units were completed and sold. Costs transferred in from the prior department totaled\n\n$39,375,000. No materials are added in the final processing department. A total of $20,807,500 of\n\nconversion cost was incurred in the final processing department during the year.\n\nRequired:\n\n1.\n\nTom Winthrop estimated that the units in ending inventory in the final processing department\n\nwere 30% complete with respect to the conversion costs of the final processing department. If this\n\nestimate of the percentage completion is used, what would be the Cost of Goods Sold for the year?\n\n(Note: Since all units completed were sold, the cost of goods transferred out = Cost of Goods Sold.)\n\n2.\n\nGary is recommending that the completion percentage by adjusted by 10 percentage points in\n\norder to assist the team in making their bonus.\n\na. Calculate the cost of goods sold if the ending inventory is 20% complete in regard to\n\nconversion costs. Would net income increase or decrease if this option was chosen over the 30%\n\ncompletion percentage? How much is the increase?\n\nb. Calculate the cost of goods sold if the ending inventory is 40% complete in regard to\n\nconversion costs. Would net income increase or decrease if this option was chosen over the 30%\n\ncompletion percentage? How much is the increase?\n\nc. Based on your calculations, which percentage is Gary suggesting that Mary use for her ending\n\ninventory calculations."},{"left":"","right":""},{"left":"","right":""},{"left":"","right":""}]


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