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SeaWorthy uses three processes to manufacture lifts for personal watercraft: forming a lifts parts from galvanized steel, assembling the lift, and testing the completed lifts. The lifts are transferred to finished goods before shipment to marinas across the country. SeaWorthys Testing Department requires no direct materials. Conversion costs are incurred evenly throughout the testing process. Other information follows:

Units:
Beginning work in process	2,100 units
Transferred in from the Assembling Dept. during the period	7,300 units
Completed during the period	4,300 units
Ending work in process (40% complete as to conversion work)	5,100 units
Costs:
Beginning work in process (transferred-in cost, $93,200; conversation costs, $18,300	$111,500
Transferred in from the Assembling Dept. during the period	$687,000
Conversion costs added during the period	$76,800

The cost transferred into Finished Goods Inventory is the cost of the lifts transferred out of the Testing Department. SeaWorthy uses weighted-average process costing.

Requirements

R1. Draw a time line for the Testing Department.

R2. Use the time line to compute the number of equivalent units of work performed by the Testing Department during the period.

R3. Compute SeaWorthys transferred-in and conversion costs per equivalent unit. Use the unit costs to assign total costs to (a) units completed and transferred out of Testing and (b) units in Testings Ending work in process inventory.

R4. Compute the cost per unit for lifts completed and transferred out to Finished goods inventory. Why would management be interested in this cost?

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