Chapter 4, Problem 34P

Scrooge and Zilch, a public accounting firm in London, is engaged in the preparation of income tax returns for individuals. The firm uses the weighted-average method of process costing for internal reporting. The following information pertains to February. (£ denotes the British monetary unit, pounds sterling.)*

*Although the euro is used in most European markets, day-to-day business in the United Kingdom continues to be conducted in pounds sterling.

Required:

1. 1. Compute the following amounts for labor and for overhead:
   1. a.      Equivalent units of activity.
   2. b.      Cost per equivalent unit. (Remember to express your answer in terms of the British pound sterling, denoted by £.)
2. 2. Compute the cost of returns in process as of February 28.