(Weighted average) You have just been hired as the cost accountant for California Micro, a producer of personal computer cases. This position has been vacant for one month. John Friend, 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 produc¬ tion 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 Finished Goods Inventory was determined to be $124,033.

a. Prepare schedules for July 1997, 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 entry to record the July transfer of completed goods. (CPA adapted)

LO1

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UNITS DM COST DL COST Work in Process 7/1/97 (70% complete as to labor and overhead) Units started in production 100,000 1,300,000 $ 750,000 $ 215,000 Costs for July 4,850,000 3,265,000 Work in Process 7/31/97 (40% complete as to labor and overhead) 400,000