Ro-Day-O Inc. manufactures belt buckles in a single-step production process. The following information is available for June 2010:
Beginning work in process: whole units - 200,000, cost of material - $1,200,000, cost of labor - $1,728,000. Units started during period: whole unit - 1,000,000, cost of material - 7,800,000, cost of labor - 9,612,000. Units in ending inventory: whole units - 300,000.
Beginning inventory units were 100 percent complete as to material and 80 percent complete as to labor. The ending inventory units were 100 percent complete as to material and 50 percent complete as to labor. Overhead is applied to production at the rate of 60 percent of direct labor cost.
a. Prepare a schedule to compute equivalent units of production by cost component assuming the weighted average method.
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