Atlantic City Taffy Company produces various kinds of candy, but salt-water taffy is by far its most important product. The company accumulates costs for its product using process costing. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process.

Required: 

Use weighted-average process costing in completing the following requirements.

1. Prepare a schedule of equivalent units.

2. Compute the costs per equivalent unit.

3. Compute the cost of goods completed and transferred out during August.

4. Compute the cost remaining in the work-in-process inventory on August 31.

5. Prepare a journal entry to record the transfer of the cost of goods completed and transferred out.

Transcribed Image Text:

Production Repor For August 20x1 Percentage of Completion with Respect to Conversion 80% Equivalent Units Physical Unlts 40,000 80,000 120,000 100,000 20,000 120,000 Direct Material Conversion Work in process, August 1 Units started during August Total units to account for Units completed and transferred out during August Work in process, August 31 Total units accounted for 100,000 100,000 20,000 30% 6,000 Direct Material Conversion Total Work in process, August1 Costs incurred during August Total costs to account for 42,000 305,280 347,280 784,400 $138,000 $1,089,680 $1,227,680 96,000 880,400