Formic CountertopFormic Countertop produces Formica countertops in two sequentia
ID: 2406189 • Letter: F
Question
Formic CountertopFormic Countertop produces Formica countertops in two sequential production? departments: Forming and Polishing. The Polishing Department calculated the following costs per equivalent unit? (square metres) on its OctoberOctober production cost? report:
?
During October 180,000 square metere were completed and transferred out of the Polishing Department to finished goods inventory. The countertops were subsequently sold for
$ 13.00 per square metre.
Requirements
1.
What was the cost per square metre of the finished? product?
2.
Did most of the production cost occur in the Forming Department or in the Polishing? Department? Explain how you can tell.
3.
What was the gross profit per square? metre?
4.
What was the total gross profit on the countertops produced in OctoberOctober??
Enter the? formula, then compute the gross profit per square metre.
x
=
Total gross profit
x
=
Transferred-in Direct Materials Conversion Costs Cost per equivalent unit: $2.94 $0.30 $1.46Explanation / Answer
1 Co.'s cost per square foot of making one unit is $4.70 Total Cost per unit = Transferred in Cost+Direct Material+Conversion Cost = 2.94+$0.30+$1.46 $ 4.70 2 Most of the cost of producing the countertops occurred in the Forming Department. The transferred-in costs of $2.94 represent the bulk of the cost incurred per unit 3 Gross profit per square mtr = Sales price per square mtr - Cost per square mtr = $13-$4.70 $ 8.30 4 Total gross profit = Square mtr sold x Gross profit per square mtr = 180000 sq mtr*$8.30 $ 1,494,000.00