Earth company is a manufacturer of circuit boards. The companys chief financial officer is trying to verify the accuracy of the ending work-in-process and finished goods inventories prior to closing the books for the year.you have been asked to assist in this verification. The year end balances shown on Earth companys books are as follows:

	Units	Costs
Work in process, December 31 (50% complete as to labour	250,000	$ 700,000
and overhead)
Finished goods , December 31	150,000	1,000,000

Materials are added to production at the beginning of the manufacturing process, and overhead is applied to cash product at the rate of 70% of direct labour cost. There was no finished goods inventory at the beginning of the year. A review of Earth Companys inventory and cost records has disclosed the following data, all of which are accurate:

		Cost
	Units	Materials	Labour
Work in process, January 1 (80% complete as to labour	100,000	$ 200,000	315,000
and overhead)
Units started into production	900,000
Cost added during the year:
Materials cost		1,300,000
Labour cost			1,985,000
Units completed during the year	750,000

The company uses the weighted average cost method.

Required:

1. Determine the equivalent units and costs per equivalent unit for materials, labour, and overhead for the year.

2. Determine the amount of cost that should be assigned to the ending work in- process and finished goods inventories.

3. Prepare the necessary correcting journal entry to adjust the work-in-process and finished goods inventories to the correct balances as of December 31.

4. Determine the cost of goods sold for the year assuming there is no under or over applied overhead.