Prepare production cost report to verify inventory balances

Assignment Help Accounting Basics

Reference no: EM132730416

Question - You are engaged in the audit of the December 31, 2013, financial statements of Epworth Products Corporation. You are attempting to verify the costing of the work-in-process and finished goods ending inventories that were recorded on Epworth's books as follows:

Units Cost

WIP 300,000 $860,000

(50% complete as to labor and overhead)

Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 60 percent of direct labor costs. Epworth uses the FIFO costing method. A review of Epworth's 2013 inventory cost records disclosed the following information:

Units Materials Labor

WIP, Jan. 1, 2013 200,000 $200,000 $315,000 (80% complete as to labor and overhead)

Started 1,000,000

Completed 900,000

Current period costs $1,300,000 $1,991,375

Required - Prepare a production cost report to verify the inventory balances. What is the amount of potential understatement or overstatement of the ending work-in-process account?

Reference no: EM132730416

Questions Cloud

Create high-performance work systems : Sociotechnical systems is organizational behavior concept that reflects importance of integrating people and technology to create high-performance work systems

Make schedules to calculate the amount of gross profit : Make schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2020, and the amount to be shown as contract assets

What is the typical educational attainment : Have recent US laws or international events impacted this group in the USA? For example: If your subject is from Mexico, major developments in Arizona

Strategy formulation and strategy implementation : What is the difference between strategy formulation and strategy implementation? What are the different levels of strategy?

Prepare production cost report to verify inventory balances : Prepare a production cost report to verify the inventory balances. What is the amount of potential understatement or overstatement

What personal aspects of the american values system made : Explain what personal characteristics and aspects of the American values system made the person well-suited or ill-suited for American life?

Determine property, plant, and equipment costs : Determine property, plant, and equipment costs - Cost of paving parking lot for new building constructed 17,900

Did settle in an ethnically homogenous neighborhood : Did settle in an ethnically homogenous neighborhood with people of the same ethnic or racial origin, or in a city or region of the USA known

What will be the profit or loss to an investor : What will be the profit/loss to an investor who buys the call for $4.00 in the following scenarios for stock prices in six months

User Account

All Pages