Question 3 (20 marks) You are the Assistant to Chief Accountant of Challenger Watch Ltd. You are trying to verify the accuracy of the ending WIP and finished goods inventories prior to closing the books for the year. You are assigned to take up the year end closing verification task. The year end balances shown on the company books are as follows: Units Cost ( Se WIP, Dec 31 (labour and overhead 50% compl. 300,000 660,960 Finished Goods, Dec 31 200,000 1,009,800 Materials are added to production at the beginning of the production process, and overhead is applied at the rate of 60% of direct labour cost. There was no finished goods inventory at the start of the year. A review of the company inventory and cost records has disclosed the following data: e Units Mat. Cost (S) Lab. Cost ($ WIP, Jan 1 (labour and overhead 80% compl) 200,000 200,000 315,000 Started into production 1,000,000 Cost added during the year? Materials 1,300,000 Labour 1.995,000 Units completed during the year 900,000 de de de The company uses the weighted average method. Required: a) Determine the equivalent units and costs per equivalent unit for materials, labour, and overhead for the year. (6 marks) b) Determine the amount of cost that should be assigned to the ending WIP and finished goods inventories. (8 marks) c) Prepare the necessary correcting journal entries to adjust the WIP and finished goods inventories to the correct balances as at Dec 31. (3 marks) d) Determine the cost of goods sold for the year assuming there is no over and under applied overhead