Problem:
(Standard process costing) HealthySight is a manufacturer of high-quality lenses for sunglasses and ski goggles. HealthySight uses a standard process costing system and carries inventories at standard. In May 2001, the following data were available:
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Standard Cost
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of 1 Unit
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Direct material
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$ 4.50
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Conversion
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12.50
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Total manufacturing cost
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$17.00
|
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Beginning WIP Inventory
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10,000 units (100% DM; 70% conversion)
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|
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Started in May
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180,000 units
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|
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Completed in May
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160,000 units
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|
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Ending WIP Inventory
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? units (100% DM; 60% conversion)
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|
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Actual costs for May
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|
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Direct material
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$ 781,000
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|
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Conversion
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2,045,000
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|
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Total actual cost
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$2,826,000
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|
A. Prepare an equivalent units of production schedule.
B.Prepare a cost of production report and assign costs to goods transferred and to inventory.
C.Calculate and label the variances and charge them to Cost of Goods Sold.