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Fairfax Company uses weighted-average process costing to account for its production costs. Direct labor is added consistently throughout the process. Direct materials are added at the starting of the process. During September, the company transferred 735,000 units of product to finished goods. At end of September, the goods in process inventory consist of 207,000 units that are 90 percent complete with respect to labor. Starting inventory had $244,920 of direct materials and $69,098 of direct labor cost. The direct labor cost added in September is $1,312,852, and direct materials cost added is $1,639,080
Evaluate both the direct labor cost and the direct materials cost per equivalent unit.
Prepare absorption and contribution margin income statements for the succeeding quarter for the division and compute production costs per unit for both approaches and for both quarters.
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