You are employed by Spirit Company, a manufacturer of digital watches.

You are employed by Spirit Company, a manufacturer of digital watches.  The 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 Spirit’s inventory and cost records has disclosed the following data:

                                                                                                                                                                                                                                           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.

Required (support your work):

  1. Determine the equivalent units and costs per equivalent unit for materials and conversion costs. (10 points)
  2. Are the ending cost balances in the WIP and Finished Goods inventory as shown? If they are not correct, what should the ending cost balances be?  Prepare any necessary journal entries. (15 points)
  3. Determine the cost of goods sold for the year (assume no over- or under-applied overhead).







Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10