Problem:
(Weighted average)Alt Enterprises manufactures belt buckles in a single-stepproduction process. To determine the proper valuations for inventory balances and Cost of Goods Sold, you have obtained the following information forAugust 2001:
|
Whole
|
Cost of
|
Cost of
|
|
Beginning work in process
|
Units
|
Material
|
Labor
|
|
Units started during period
|
400,000
|
$ 400,000
|
$ 630,000
|
|
Units transferred to finished goods
|
2,000,000
|
2,600,000
|
3,990,000
|
|
1,800,000
|
|
|
Beginning inventory units were 100 percent complete as to material, but only 80 percent complete as to labor and overhead. The ending inventory units were 100 percent complete as to material and 50 percent complete as to conversion.Overhead is applied to production at the rate of 60 percent of direct labor cost.
a.Prepare a schedule to compute equivalent units of production by cost componentassuming the weighted average method.
b.Determine the unit production costs for material and conversion.
c.Calculate the costs assigned to completed units and ending inventory for August 2000.