Refer to the scenario located in the “Analyze, Think, Communicate” section 12-5 of Ch. 12,...

Question

Refer to the scenario located in the “Analyze, Think, Communicate” section 12-5 of Ch. 12, “Job-Order, Process, and Hybrid Costing Systems” of Fundamental Managerial Accounting Concepts (eText, pg. 585). This scenario involves an altercation between Rene Alverez and Bill Sawyer and requires you to weigh in with calculations and comments on the matter.

Read the scenario in the textbook and complete the activity below.

Compute the equivalent cost per unit, assuming the ending inventory is considered to be 40 percent complete.

Compute the equivalent cost per unit, assuming the ending inventory is considered to be 60 percent complete.

Write a 350-word summary of your calculations and findings. Comment on Mr. Sawyer’s motives for establishing the percentage of completion at 60 percent rather than 40 percent.

Sumit · Accepted Answer

Equivalent Cost of per unit Assuming Ending Inventory to be 40% Complete:
	Particulars
	Units
	% Completed
	Product
	Inventory Transferred Out
	90000
	100%
	90000
	Ending Inventory
	10000
	40%
	4000
	Equivalent Number of Units
	
	
	94000
	Production Cost for the period
	
	
	$ 9,02,400.00
	
	
	
	
	Equivalent cost per Unit
	
	
	$9.60
Equivalent Cost of per unit Assuming Ending Inventory to be 60% Complete:

Refer to the scenario located in the “Analyze, Think, Communicate” section 12-5 of Ch. 12, “Job-Order, Process, and Hybrid Costing Systems” of Fundamental Managerial Accounting Concepts (eText, pg....

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