Question: Keep Cool Industries Inc manufactures fans for personal use Department

Keep Cool Industries, Inc., manufactures fans for personal use. Department 70 is responsible for assembling the fan. Department 71 packages them for shipment. Keep Cool recently produced 10,000 fans for a national retailer. In fulfilling this order, the departments incurred the following costs:

1. Compute the unit cost for each department.
2. Compute the total unit cost for the national retailer order.
3. The selling price for this order was $10 per unit. Was the selling price adequate? List the assumptions and/or computations upon which you based your answer. What suggestions would you make to Keep Cool’s management about the pricing of future orders?
4. Compute the prime costs and conversion costs per unit for eachdepartment.

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  • CreatedMarch 26, 2014
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