posted by Crystal on .
Department A had 10,000 units in work in process that were 30% converted at the beginning of the period at a cost of $10,000. During the period, 15,000 units of direct materials were added at a cost of $60,000, 16,000 units were completed, and 9,000 units were 40% completed. The first in, first out method is used and all materials are added at the beginning of the process. Direct labor was $30,000, and factory overhead was $60,000 during the period.
1. What is the number of equivalent units of conversion for the perod? 12,600
2. What is the tontoal conversion costs for the period? $90,000
3. What was the conversion cost of the units started and completed during the period?
4. What was the converision cost of the 9,000 units in process at the end of the period?
A fast-food establishment is thinking of buying a new cooking grill and refrigeration unit. The costs of these new machines are $12,500 and $9,000, respectively. The installation costs of the new equipment will run about $800. It is estimated that 10% more customers can be served with the new equipment, which would mean an additional annual net cash flow of approximately $4,500. The salvage value of the old grill and refrigeration unit is estimated to be $1,000.
The firm's cost of capital is 12%. The equipment should last 10 years, at a minimum.