Ashton Ski Company manufactures snow skis. During the most recent accounting per

Question

Ashton Ski Company manufactures snow skis. During the most recent accounting period, the company’s finishing department transferred 5,000 sets of skis to finished goods. At the end of the accounting period, 500 sets of skis were estimated to be 40 percent complete. Total product costs for the finishing department amounted to $416,000.

Required

Determine the cost per equivalent.

Determine the cost of the goods transferred out of the finishing department.

Determine the cost of the finishing department’s ending work in process inventory.

Explanation / Answer

Equivalent units=5000+(500*40%)= 5200 1 Cost per equivalent unit=416000/5200= $80 2 Cost of the goods transferred out=5000*80 = $400000 3 Cost of work in process inventory = 500*40%*80= $16000

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