Golf World, Incorporated (GWI) sells products and services for the sport of golf. One of its key
Question:
Golf World, Incorporated (GWI) sells products and services for the sport of golf. One of its key business units specializes in the repair and reconditioning of golf carts. GWI enters into contracts with a number of golf clubs throughout the U.S. in which the clubs send their carts to GWI for a complete reconditioning: motor, frame repair where necessary, and replacement of seat covers and canvas tops. The clubs usually will cycle 10–15% of their carts through this process each year. Because GWI’s business has been growing steadily, it is very important to complete the reconditioning of the carts within a budgeted time and cost. The firm uses weighted-average process costing to keep track of the costs incurred in the reconditioning process.
GWI’s golf cart repair and reconditioning unit has the following information for the month of November, in which 1,190 carts were started for reconditioning:
Beginning WIP: 140 units, 60% complete for materials ($16,500) and 50% complete for conversion ($20,050)
Current costs:
Direct Materials: $199,900
Conversion: $606,600 (conversion costs for GWI usually average about $240 to $310 per unit, based on an average of 1,110 – 1,290 units completed each month)
Ending WIP: 290 units, 40% complete for direct materials and 30% complete for conversion
Required
1. Complete the production cost report for the month of November. (Round "Cost per equivalent unit" answers to 4 decimal places.)
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins