The Laramie Factory Produces Expensive Boots

question 105

Essay

The Laramie Factory produces expensive boots. It has two departments that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process.
Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $10,000 for conversion costs. Ending inventory was 30% complete.
Additional information about the two departments follows:

Required:
Prepare a production cost worksheet using weighted-average costing for the finishing department.

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Definitions:

Magazine Circulation

The total number of copies of a magazine that are distributed to subscribers and retailers within a specific period.

Consumer Surplus

The distinction between the aggregate amount consumers are inclined and capable of paying for a service or product and what they actually disburse.

Minimum Imposed Price

A price floor set by the government or a regulatory body, below which the price of a good or service cannot fall.

Producer Surplus

The difference between the amount producers are willing and able to supply a good for and the actual amount received by them when the good is sold.