Posted: April 26th, 2016

What is the unit cost of each model transferred to finished goods in August?

Problem Operations Costing: Work-in-Process Inventory” to see the charted data for this problem.

Miller Outdoor Equipment makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert. Miller Manufacturers the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After the initial process in Stitching, the other three models are transferred to Customizing for additional add-ons and then finally transferred to finished goods.

There were no beginning work-in-process inventories on August 1. Data for August is shown in the attached table. Ending work-in-process is 40 percent completed in Stitching and 20 percent complete in Customizing. Conversion costs are allocated based on the number of equivalent units processed in each department.

1. What is the unit cost of each model transferred to finished goods in August?
2. What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing?

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