You have just been hired as the cost accountant for Sun Valley Micro, a producer of personal computer cases. This position has been vacant for one month. John Amos, manager of the firm’s tax department, has performed some computations for last month’s information; however, he confesses to you that he doesn’t remember a great deal about cost accounting. In the production process, materials are added at the beginning of production, and overhead is applied to each product at the rate of 70 percent of direct labor cost. There was no Finished Goods Inventory at the beginning of July. A review of the firm’s inventory cost records provides you with the following information

At the end of July, the cost of the Finished Goods Inventory was determined to be $124,033.

a. Prepare schedules for July 2000, to 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. (CPA adapted)
 

Transcribed Image Text:

Work in Process 7/1/00 (70% complete as to labor and overhead) Units started in production Costs for July Work in Process 7/31/00 (40% complete as to labor and overhead) Units 100,000 1,300,000 400,000 DM Cost $750,000 4,850,000 DL Cost $ 215,000 3,265,000 Work in Process 7/1/00 (70% complete as to labor and overhead) Units started in production Costs for July Work in Process 7/31/00 (40% complete as to labor and overhead) Units 100,000 1,300,000 400,000 DM Cost $750,000 4,850,000 DL Cost $ 215,000 3,265,000

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a 1 Equivalent units of production using the weighted average method Units started in production 100... View the full answer