Laredo Leather Company manufactures high-quality leather goods. The company\'s p
ID: 2377826 • Letter: L
Question
Laredo Leather Company manufactures high-quality leather goods. The company's profits have declined during the past nine months. In an attempt to isolate the causes of poor profit performance, management is investigating the manufacturing operations of each of its products.
One of the company's main products is leather belts. The belts are produced in a single, continuous process in the Dallas Plant. During the process, leather strips are sewn, punched, and dyed. The belts then enter a final finishing stage to conclude the process. Labor and overhead are applied continuously during the manufacturing process. All materials, leather strips, and buckles are introduced at the beginning of the process. The firm uses the weighted-average method to calculate its unit costs.
The leather belts produced at the Dallas Plant are sold wholesale for $9.20 each. Management wants to compare the current manufacturing costs per unit with the market prices for leather belts. Top management has asked the Dallas plant controller to submit data on the cost of manufacturing the leather belts for the month of October. These cost data will be used to determine whether modifications in the production process should be initiated or whether an increase in the selling price of the belts is justified. The cost per belt used for planning and control is $5.40.
The work-in-process inventory consisted of 400 partially completed units on October 1. The belts were 25 percent complete as to conversion. The costs included in the inventory on October 1 were as follows:
During October 7,800 leather strips were placed into production. A total of 7,100 leather belts were completed. The work-in-process inventory on October 31 consisted of 1,100 belts, which were 50 percent complete as to conversion.
In order to provide cost data regarding the manufacture of leather belts in the Dallas Plant to the top management of Laredo Leather Company, compute the equivalent units for material and conversion for the month of October.
In order to provide cost data regarding the manufacture of leather belts in the Dallas Plant to the top management of Laredo Leather Company, compute the cost per equivalent unit of material and conversion for the month of October. (Round cost per unit to 2 decimal places and other final answers to nearest whole number. Omit the "$" sign in your response.)
In order to provide cost data regarding the manufacture of leather belts in the Dallas Plant to the top management of Laredo Leather Company, compute the assignment of production costs to the October 31 work-in-process inventory and to goods transferred out for the month of October. (Round cost per unit to 2 decimal places and other final answers to nearest whole number. Omit the "$" sign in your response.)
In order to provide cost data regarding the manufacture of leather belts in the Dallas Plant to the top management of Laredo Leather Company, compute the weighted-average unit cost of leather belts completed and transferred to finished goods for the month of October. (Round cost per unit to 2 decimal places. Omit the "$" sign in your response.)
Laredo Leather Company
Laredo Leather Company manufactures high-quality leather goods. The company's profits have declined during the past nine months. In an attempt to isolate the causes of poor profit performance, management is investigating the manufacturing operations of each of its products.
One of the company's main products is leather belts. The belts are produced in a single, continuous process in the Dallas Plant. During the process, leather strips are sewn, punched, and dyed. The belts then enter a final finishing stage to conclude the process. Labor and overhead are applied continuously during the manufacturing process. All materials, leather strips, and buckles are introduced at the beginning of the process. The firm uses the weighted-average method to calculate its unit costs.
The leather belts produced at the Dallas Plant are sold wholesale for $9.20 each. Management wants to compare the current manufacturing costs per unit with the market prices for leather belts. Top management has asked the Dallas plant controller to submit data on the cost of manufacturing the leather belts for the month of October. These cost data will be used to determine whether modifications in the production process should be initiated or whether an increase in the selling price of the belts is justified. The cost per belt used for planning and control is $5.40.
The work-in-process inventory consisted of 400 partially completed units on October 1. The belts were 25 percent complete as to conversion. The costs included in the inventory on October 1 were as follows:
Explanation / Answer
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