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David’s company uses a process costing system in the manufacture of chairs. David’s worked on 2,600...

David’s company uses a process costing system in the manufacture of chairs. David’s worked on 2,600 chairs the past month, 2,200 of which were completed during the period. The remaining chairs were 40% complete. Each chair requires $15 in direct materials that are included in the process when a chair is started. During the month the direct labor and manufacturing overhead for the period was $70,000 and there were $600 direct labor and manufacturing overhead at the beginning of the period in the works in process account. Using the weighted average method, what was the total cost of chairs transferred to finished goods at the end of the month? What was the total cost of baskets still in process at the end of the month?

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David Company
Computation of Equivalent unit of Production
Particulars Physical Units Material Conversion
Units accounted for:
Unit completed & Transferred out 2200 2200 2200
Units in ending inventory: 400
Material (100%) 400
Conversion (40%) 160
Equivalent units of production 2600 2600 2360
David Company
Computation of Cost per equivalent unit
Particulars Material Conversion Total
Opening WIP $0 $600 $600
Cost Added during Period $39,000 $70,000 $109,000
Total cost to be accounted for $39,000 $70,600 $109,600
Equivalent units of production 2600 2360
Cost per Equivalent unit $15.00 $29.92
David Company
Computation of Cost of ending WIP and units completed & transferred out
Particulars Material Conversion Total
Equivalent unit of Ending WIP 400 160
Cost per equivalent unit $15.00 $29.92
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) $6,000 $4,786 $10,786
Units completed and transferred 2200 2200
Cost of units completed & Transferred (Unit completed * cost per equivalent unit) $33,000 $65,814 $98,814
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