PROBLEM $4-6$

Costing Inventories; Journal Entries; Cost of Goods Sold$-$Weighted Average

Cost Method $[$LO$2-$ CC$7,8$; LO$3-$ CC$12$; LO$4-$ CC$14,15,16]$

CHECK FIGURES

$(1)$ Labour: $$2\mathrm{.}63($rounded$)$ per EU

$(2)$ December $31$ WIP: $$933,750$

$(4)$ COGS: $$3,582,000(600$K units @ $$5\mathrm{.}97)$

Earth Company is a manufacturer of circuit boards. The company's 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 Company's books are as follows:Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each 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

Company's inventory and cost records has disclosed the following data, all of which are accurate:Units completed during the year

$750,000$

The company uses the weighted average cost method.

Required:

Determine the equivalent units and costs per equivalent unit for materials, labour, and

overhead for the year.

Determine the amount of cost that should be assigned to the ending work$-$in$-$process and

finished goods inventories.

Prepare the necessary correcting journal entry to adjust the work$-$in$-$process and finished

goods inventories to the correct balances as of December $31.$

Determine the cost of goods sold for the year assuming there is no under$-$ or overapplied

overhead.