5.00 points Gary Stevens and Mary James are production managers in the Consumer

Question

5.00 points Gary Stevens and Mary James are production managers in the Consumer Electronics Division of General Electronics Company, which has several dozen plants scattered in locations throughout the world. Mary manages the plant located in Des Moines, lowa, while Gary manages the plant in El Segundo, California. Production managers are paid a salary and get an additional bonus equal to 10% of their base salary if the entire division meets or exceeds its target profits for the year. The bonus is determined in March after the company's annual report has been prepared and issued to stockholders Shortly after the beginning of the new year, Mary received a phone call from Gary that went like this: Gary: How's it going, Mary? Mary: Fine, Gary. How's it going with you? of making the year's target profits. All we have to do is pull a few strings, and we'll be over the topl Well, one thing that would be easy to change What do you mean? Mary: Gary: ending work in process inventories Winthrop, my lead supervisor, who I have always trusted to provide us with good estimates as much as we can to pull this bonus out of the hat. You may not want the bonus check, but the Mary: Idont know if I can do that, Gary. Those percentage completion figures are supplied by Tom Besides, I have already sent the percentage completion figures to corporate headquarters Gary: You can always tell them there was a mistake Think about it, Mary. All of us managers are doing rest of us sure could use it The final processing department in Mary's production facility began the year with no work in process inventories. During the year, 290,000 units were transferred in from the prior processing department and 261,000 units were completed and sold Costs transferred in from the prior department totaled $76 270 000 No materials are added in the final processing department. A total of $19,099.400 of conversion cost was incurred in the final processing department during the year Required 1 tom Winthrop estimated that the units in ending inventory in the final processing department were 25% complete with respect to the conversion costs of the final processing department. If this estimate of the percentage completion is used, what would be the Cost of Goods Sold for the year? (Round your c per unit to 2 decimal places) ost

Explanation / Answer

1.

2. Increased

3. at around 26%(rounded off) it happens

if profit need to be inflated by 70470, then cost of goods sold should be declined by the same amount and inventory need to be increased to that extent.

since new calculations are based on rouding off norms given it follows as below:

Prior processing department costs                      76,270,000 Costs incurred                      19,099,400 A Costs to account for                      95,369,400 % completion EU Units completed                            261,000 100%                  261,000 Closing wip                               29,000 25%                       7,250 B units to account for                            290,000                  268,250 C=A/B Cost per Equivalent unit                     355.52 Assignment of costs Equivalent unit Per unit Total Cost of goods sold                            261,000                355.52            92,790,720

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