By how much would the managers suggested manipulation lower the unit conversion costs.docx

# By how much would the managers suggested manipulation lower the unit conversion costs.docx

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By how much would the managers suggested manipulation lower the unit conversion costs? 1. The ending WIP unit(s) = 7600 + 400 = 8000 – 7000 = 1000 2. Total conversion cost = \$300(October(Beginning)) + \$20700(October(Ending)) = \$21000 3. October(Beginning) is 400 units * 75% (remaining) = 300 units 4. October(During) is 6600 units * 100% = 6600 units 5. October(Ending) is 100 units * 50% = 500 units 6. Total units = 300 units + 6600 units + 500 units = 7400 units 7. Cost/equivalent unit = 21,000/7400 units = \$2.84 1. October(Beginning) is 400 units * 75% (remaining) = 300 units 2. October(During) is 6600 units * 100% = 6600 units 3. October(Ending) is 100 units * 60% = 600 units 4. Total units = 300 units + 6600 units + 600 units = 7500 units 5. Cost/equivalent unit = \$21,000/7500 units = \$2.80 The managers suggested manipulation of lowering the unit conversion costs is .04 cents (\$2.84 – \$2.80 = \$0.04) What should the controller do? The controller should keep all of this information secured and maintain a system of integrity with their handling. This system of the controller will make disclosing or

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