Auditing Firm was hired to perform an audit of a manufacturer in accordance with GAAS. You are the member of the engagement team assigned to perform procedures on the inventory records.
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Please solve the following: 
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X Inventory Cost Analysis To: Noah Abbott, Engagement partner From: Robin Smith, Associate auditor Re: Inventory Cost Analysis Hello Noah, My team and I prepared the following schedules as of January 31, Year 2: Equivalent units of production (EUP) Unit costs of direct materials, direct labor, and manufacturing overhead Costs of the finished goods and work-in-process inventories We determined that EUP should be calculated using the weighted average method and no spoilage occurred. Moreover, because the books have not yet been closed, any necessary adjusting journal entries still may be made. Robin Working Paper X Working Paper - inventory cost information Costs Materials[1] Units Labor Work-in-process January 1, Year 2 (80% complete as to direct labor and manufacturing overhead(21) Finished goods January 1, Year 2 200,000 0 $ 200,000 $ 0 $ 315,000 $ 0 $1,300,000 Units started Units completed 1,000,000 900,000 $1,995,000 [1] Added at beginning of the process [2] Manufacturing overhead application - 60% of direct labor cost Ending Inventories Excerpt from Accounting Records - ending inventories January 31, Year 2 Units Cost Work-in-process (50% complete as to direct labor and manufacturing overhead) Finished goods 300,000 200,000 $ 660,960 $1,009,800 1. Calculating EUP using the weighted average method requires the determination of units completed and the percentage of completion of ending work-in-process regarding each cost category. The total EUP for direct materials, direct labor, and manufacturing overhead were, respectively, 1,200,000, 1,050,000, and 1,050,000.5 Choose an option below: [Original Text] 1,200,000, 1,050,000, and 1,050,000. 1,200,000, 1,080,000, and 1,080,000. 900,000, 1,080,000, and 1,050,000. 900,000, 900,000, 900,000. RESET CANCEL ACCEPT 2. Determining the total unit cost of production requires calculating total cost and unit cost for each cost category. The total cost per EUP is $3.45. Choose an option below: [Original Text] $3.45. $3.52. $4.77. $4.95. RESET CANCEL ACCEPT 3. The cost of ending finished goods is a function of beginning inventories, production volume, sales, spoilage, and manufacturing costs. It equals $0. Choose an option below: [Original Text] $0. $660,960. $954,000 $1,009,800 RESET CANCEL ACCEPT 4. The cost of ending work-in-process also is a function of beginning inventories, production volume, sales, spoilage, and manufacturing costs. It equals $903,000. Choose an option below: [Original Text] $903,000. $954,000. $1,009,000 $1,857,000. RESET CANCEL ACCEPT 5. The auditor assigned to perform the inventory cost analysis has compared the results with the auditee's accounting records. The auditor has concluded that the appropriate adjusting journal entry is no entry. Choose an option below: [Original Text] The auditor has concluded that the appropriate adjusting journal entry is no entry. The auditor has concluded that the appropriate adjusting journal entry is as below: Ending work-in-process inventory $242,040 Ending finished goods inventory $ 55,800 Cost of goods sold 186,240 The auditor has concluded that the appropriate adjusting journal entry is as below: Ending work-in-process inventory $293,040 Ending finished goods inventory $106,800 Cost of goods sold 186,240 The auditor has concluded that the appropriate adjusting journal entry is as below: Ending work-in-process inventory $293,040 Cost of goods sold $293,040 RESET CANCEL ACCEPT 1. Calculating EUP using the weighted-average method requires the determination of units completed and the percentage of completion of ending work-in-process regarding each cost category. The total EUP for direct materials, direct labor, and manufacturing overhead were, respectively, 1,200,000, 1,050,000, and 1,050,000.8 2. Determining the total unit cost of production requires calculating total cost and unit cost for each cost category. The total cost per NP is $3.45. 3. The cost of ending finished goods is a function of beginning inventories, production volume, sales, spoilage, and manufacturing costs. It equals $0.2 4. The cost of ending work-in-process also is a function of beginning inventories, production volume, sales, spoilage, and manufacturing costs. It equals $903,000.0 5. The auditor assigned to perform the inventory cost analysis has compared the results with the auditee's accounting records. The auditor has concluded that the appropriate adjusting journal entry is no entry
