Problem - WA EUP & cost assignment

Ro-Day-O Inc. manufactures belt buckles in a single-step production process.

The following information is available for June 2010:

                                                     Whole Units       Cost of Material            Cost of Labor

Beginning work in progress              200,000               $1,200,000                $1,728,000

Units started during period               1,000,000             $7,800,000               $9,612,000                                                          

Units in ending Inventory                 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.

b. Determine the unit production costs for material and conversion.

c. Calculate the costs assigned to completed units and ending inventory for August 2010.             

d. Reconcile the calculations in parts (a) and (b).