Everglades Furniture Uses a Process Costing System to Account for Its

question 89

Essay

Everglades Furniture uses a process costing system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to materials, 55% complete as to conversion) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to conversion. Everglades uses weighted-average costing.
Required:
(Use 4 decimal places in your calculations.)
a. Compute the equivalent units of production for each input.
b. Compute the cost per equivalent unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or service delivery.

Fixed Costs

Fixed outgoings, including rent, salaries, and insurance, that are unaffected by production or sales volumes.

Net Income

The total earnings or profit of an individual or business after deducting expenses and taxes.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.