Problem 2 25 points The following data pertain to a producti

Problem 2 (25 points). The following data pertain to a production center of Navajo Company, a manufacturer of garbage bins. Work in Process Inventory, August 1 (80% complete as to materials and 30% as to conversion costs) Number of Units Direct Materials Cost Direct Labor Cost Manufacturing Overhead Applied (S7 per machine hour) 5,000 8,200 3.400 2.100 Units Started in August 14.500 Costs Incurred in August: Direct Materials Cost Direct Labor Cost Manufacturing Overhead Applied (7,000 machine hours incurred) 23,500 41,200 The ending inventory consisted of 4,000 units which were 70% complete as to materials and 40% complete as to conversion costs. REQUIRED: Using the attached forms, prepare the schedules listed below that are required to prepare the Cost of Production Report for Navajo Company, using the FIFO method. Round all costs per equivalent unit to four decimal places and all other dollar amounts to the nearest whole dollar () Schedule of Physical and Equivalent Units. (2) Unit Cost Analysis Schedule (3) Cost Summary Schedule

Solution

(1) NAVAJO COMPANY SCHEDULE OF PHYSICAL AND EQUIVALENT UNITS FOR MONTH OF AUGUST Equivalent Units Physical Direct Conversion Units Materials Costs Units To Account For: Beginning WIP Inventory          5,000 Units Started During Period        14,500 Total Units To Account For        19,500 Units Accounted For: Units Completed During Period: From Beginning WIP Inventory(20%/70%)          5,000          1,000            3,500 Units Started and Completed During Period        10,500        10,500          10,500 Total Units Completed During Period        15,500        11,500          14,000 Units in Ending WIP Inventory(70%/40%)          4,000          2,800            1,600 Total Units Accounted For        19,500        14,300          15,600 (2) NAVAJO COMPANY UNIT COST ANALYSIS SCHEDULE FOR MONTH OF AUGUST Direct Conversion Total Materials Costs Costs Costs To Account For: Costs From Beginning WIP Inventory $      8,200 $      5,500 $      13,700 Current Period Costs (A)        23,500        90,200        113,700 (41200+7*7000 = 90200) Total Costs To Account For $    31,700 $    95,700 $    127,400 Divided By Equivalent Units (B)        14,300        15,600 Cost Per Equivalent Unit (A ÷ B)        1.6434        5.7821 (3) NAVAJO COMPANY COST SUMMARY SCHEDULE FOR MONTH OF AUGUST Direct Conversion Total Materials Costs Costs Costs Accounted For: Costs From Beginning; WIP Inventory     8,200.00     5,500.00     13,700.00 To Complete Beginning WIP Inventory: Direct Materials (1000 x 1.6434)     1,643.40       1,643.40 Conversion Costs (3500 x 5.7821) 20,237.35     20,237.35 Units Started and Completed During Penrod: Direct Materials (10500 x 1.6434) 17,255.70     17,255.70 Conversion Costs (10500 x 5.7821) 60,712.05     60,712.05 Total Cost of Units Completed and Transferred to Finished Goods 113,548.50 Ending Work in Process Inventory-: Direct Materials(2800 x 1.6434) 4601.52 4601.52 Conversion Costs (1600 x 5.7821) 9251.36 9251.36 Total Cost of Ending Work in Process 13852.88 Total Costs Accounted For* 127,400.00 * rounding error of $1.38