Carter Furniture manufactures three models of tables: oak, cherry, and walnut. All models are assembled in the same plant and require the same assembling operations. The difference is in the cost of the wood. The following data are available for July. Oak Cherry Walnut TotalNumber of units 1,200 700 900 2,800 Wood costs per unit$80 $120 $105 Other costs: Direct labor $165,000 Indirect materials 26,000 Other overhead 61,000 Total $252,000 Carter uses operations costing and assigns conversion costs on the number of tables built.Required:Compute the cost of the each of the three models for July.
What will be an ideal response?
Conversion costs: $252,000/2,800 units = $90/unit;
Oak: $80 wood + $90 conversion = $170/unit;
Cherry: $120 wood + $90 conversion = $210/unit;
Walnut: $105 wood + $90 conversion = $195/unit
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