(Weighted average) Lei Enterprises manufactures belt buckles in a single-step production process. To determine the proper valuations for inventory bal¬ ances and Cost of Goods Sold, you have obtained the following information for August 2006:

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 component assuming 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 2006.

Transcribed Image Text:

Whole Units Beginning work in process 400,000 Units started during period 2,000,000 Units transferred to finished goods 1,800,000 Cost of Material $ 400,000 2,600,000 Cost of Labor $ 576,000 3,204,000