ACC - Dick Cheney's company’s Problem

profileKnowledgeCats
 (Not rated)
 (Not rated)
Chat

Problem 3:
Dick Cheney's company’s CFO is trying to verify the accuracy of the ending WIP 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 Spirit’s books are as follows:
Units Costs
WIP, 12/31 (conversion 50% complete) 300,000 $ 660,960
Finished Goods, 12/31 200,000 $1,009,800

Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 60% of direct labor cost. There was no Finished Goods inventory at the beginning of the year (all prior year finished goods were sold). A review of Cheneys inventory and cost records has disclosed the following data:
Direct Costs
Units Materials Labor
WIP, January 1 (conversion 80% complete) 200,000 $200,000 $315,000
Units started into production 1,000,000
Costs added during the year:
Materials cost $1,300,000
Labor cost $1,995,000
Units completed during the year 900,000

The company uses the weighted average method.

    • 10 years ago
    ACC - Dick Cheney's company’s Problem Solution
    NOT RATED

    Purchase the answer to view it

    blurred-text
    • attachment
      acc_-_dick_cheneys_companys_problem_solution.xlsx