(Weighted average) Sun Valley Micro produces computer cases. 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 di¬ rect labor cost. No Finished Goods Inventory existed at the beginning of July. A review of the firm’s inventory cost records provides the following information:

At the end of July, the cost of 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.

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Units DM Cost DL Cost $ 750,000 $ 215,000 5,650,000 4,105,500 400,000 Work in process 7/1/06 (70% complete as to labor and overhead) Units started in production Costs for July Work in process 7/31/06 (60% complete as to labor and overhead) 100,000 1,500,000