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PART ONE:

Barstow Manufacturing Company has two service departments product design and engineering support, and two production departments assembly and finishing. The distribution of each service department's efforts to the other departments is shown below:

FROM	TO
	Design			Support			Assembly			Finishing
Design	0	%		20	%		10	%		70	%
Support	10	%		0	%		40	%		50	%

The direct operating costs of the departments (including both variable and fixed costs) were as follows:

Design	$	130,000
Engineering Support	$	270,000
Assembly	$	490,000
Finishing	$	780,000

The total cost accumulated in the finishing department using the reciprocal method is(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

• $1,925,714.

• $571,429.

• $626,837.

• $1,098,571.

• $1,043,163.

PART TWO:

O'Leary Company manufactures Product Z in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in Department B. O'Leary uses the weighted-average method. Conversion costs for Department B were 40% complete as to the 5,000 units in the beginning work-in-process (WIP) inventory and 50% complete as to the 7,000 units in the ending work-in-process inventory. 10,000 units were completed and transferred out of Department B during October. An analysis of the costs relating to work-in-process inventories and production activity in Department B for October follows:

	Transferred- in Costs			Materials Costs			Conversion Costs
WIP, October 1:	$	10,000		$	3,000		$	1,000
Costs added in October		24,000			5,500			4,400

The total cost per equivalent unit transferred-out for October of Product Z, rounded to the nearest penny, was:

• $2.75.

• $2.80.

• $2.85.

• $2.90.

• $2.95.

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