Question

Franck Ribéry is the owner of a high end day spa in New York City called Ribéry in Reverie.

At the start of last year the business has recently started selling personally endorsed intensified shin repair kits ISRK's.

Beginning inventory = 120,000 units @ 55% completed at cost of $800,000**

Ending Inventory = 250,000 units @ 79% complete

During the quarter 165,000 units were expensed to COGS

Materials Cost = $4,581,360

Conversion Costs = $3,599,640

A. Based on the following information how many equivalent ISRK's were produced? (8 points)

B. What is the materials cost per unit for the ISRK's? (3 points)

C. What are the conversion costs per unit for the ISRK's? (3 points)

Calculate total cost (materials cost + conversion costs) of the following:

D. Inventory in process and completed during the quarter (4 points)

E. Units started and completed during the quarter (4 points)

F. Units transferred out (4 points)

G. Inventory in Process at the end of the quarter (4 points)

Hint D + E = F***

F + G = (beginning inventory + materials costs + conversion costs)

Answer 1

Calculation of conversion cost per unit:

Equivalent units from beginning inventory (120000×55%)	66000
Add: units transferred to COGS	165000
Sub total	231000
Add : Equivalent units in ending inventory (250000×79%)	197500
Total equivalent units completed	428500

A) Based on the following information 428500 equivalent ISRK's were produced.

B) calculation of material cost per unit for the ISRK's

Total material cost $4581360

Material cost per unit ($4581360/428500units) = $10.69.

C) calculation of conversion cost per unit:

Total conversion cost$3599640.

Conversion cost per unit ($3599640/428500units) =$8.4

Total cost = material cost+conversion cost

Therefore total cost= $4581360+$3599640= $ 8181000

D)

E)

F) Units transferred out is $800000

G) Inventory in the process at the end of the quarter$8181000 ( beginning inventory+material cost+conversion cost)