Chapter 4, Problem 32P

A-1 Products manufactures wooden furniture using an assembly-line process. All direct materials are introduced at the start of the process, and conversion cost is incurred evenly throughout manufacturing. An examination of the company’s Work-in-Process Inventory account for June revealed the following selected information.

Conversations with manufacturing personnel revealed that the ending work in process was 60 percent complete as to conversion.

Required:

1. 1. Determine the number of units in the June 30 work-in-process inventory.
2. 2. Calculate the cost of goods completed during June and prepare the appropriate journal entry to record completed production.
3. 3. Determine the cost of the June 30 work-in-process inventory.
4. 4. Briefly explain the meaning of equivalent units. Why are equivalent units needed to properly allocate costs between completed production and production in process?