SECTION B-OPEN QUESTIONS Note: ALL 2 questions are compulsory and MUST be attempted. (Total 80 nrarks). Problem 1: XYZ Inc. is a manufacturer of audio CDs. The company's chief financial officer is trying to verify the accuracy of the December 31 work in process and finished goods inventories prior to closing books for the year. He strongly suspects that the year-end dollar balances are incorrect, but he believes that all other data are accurate. The year ended balances are as follows: Item WIP (100% complete as to materials:50% complete as to Units 30 000 Dollar amounts 80 000$ conversion) Finished goods 60 000 240 000S The company accounts for units and costs by using FIFO method. There is only one processing department, information for which provided below: June 1 bal. (20 000; 100% complete as to materials, 80% Work in Process 70'000 Completed and transferred (790'000) complete as to conversion) Costs added during June: Raw materials Direct labor Overhead June 31 bal. (30'000, 70% 880'000 1367'000 1'000'000 complete as to materials; 50% complete as to conversion) The 70'000 figure for the beginning inventory in the mixing department consisted of the following cost elements: raw materials, 22'000; direct labor, $28'000; and overhead applied, $20'000. Required: 1. Determine the equivalent units and unit costs for material so as for conversion. (10 marks) 2. Determine the ending amount of WIP, FG, and COGS. (10 marks) 3. Prepare the necessary correcting journal entries to adjust items above (10 marks)