LO.2 (WA EUP; cost assignment) Spangenberg Products manufactures computer cases. All material is added at the start of production and overhead is applied to each product at the rate of 70 percent of direct labor cost. At the beginning of July, there were
no units in the Finished Goods Inventory. The ?rm's inventory cost records provide the following information:
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Units
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DM Cost
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DL Cost
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|
Work in Process Inventory, 7/1 (70% complete as to labor)
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100,000
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$ 750,000
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$ 215,000
|
|
Units started in production
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1,500,000
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|
|
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Costs for July
|
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5,650,000
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4,105,000
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Work in Process Inventory, 7/31 (60% complete as to labor)
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400,000
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|
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At the end of July, the cost of the Finished Goods Inventory was determined to be
$124,000.
a. Compute the following:
1. Equivalent units of production using the weighted average method.
2. Unit production costs for material, labor, and overhead.
3. Cost of goods sold.
b. Prepare the journal entries to record the July transfer of completed goods and the July cost of goods sold.