Surf's Up Manufactures Surfboards

question 92

Essay

Surf's Up manufactures surfboards. Production has just been completed for May 20xx. The beginning balances in Work in Process Inventory were direct materials costs, $31,400, and conversion costs, $16,400. Cost of direct materials used in March was $394,800, and March's conversion costs were $598,400. A schedule of equivalent production for March has already been prepared. It shows a total of 9,400 equivalent units as to direct materials and 8,800 equivalent units as to conversion costs.
From this information, compute the cost per equivalent unit for May. Use the FIFO costing method.

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Definitions:

Return on Equity Ratio

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company uses investments to generate earnings growth.

Quality of Income Ratio

A financial metric that evaluates the ability of a company to translate its earnings into cash, reflecting the quality and sustainability of its earnings.

Cash Ratio

A liquidity metric that measures a company's ability to cover its short-term liabilities with its cash and cash equivalents.

Long-Term Debt

Debt that is due to be paid off over a period longer than one year.