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Passera Inc

Marketing

Passera Inc. manufactures a single product in a continuous processing environment. All materials are added at the beginning of the process, and conversion costs are applied evenly throughout the process. To assign costs to inventories, the company uses a weighted-average process costing.

The following information was available for 2016:

 

Sales (selling price per unit, $40) $4,080,000
Actual manufacturing overhead 660,000
Selling and administrative expenses 328,000
Unit costs of production:  
Direct materials (1 kilogram) 6
Direct labor (1/2 hour) 8
Overhead 9
Total 23
Units transferred to finished goods 140,000
Materials purchased 125,000
Materials used in process 136,000

An inventory count at year-end (December 31, 2016) revealed that the inventories had the following balances:

 

Raw materials 8,000 kilograms
Work in process (45% complete) 22,000 units
Finished goods 45,000 units

January 1, 2016, work in process units is 70% complete. The unit cost of production was the same in 2016 as it was in 2015.

The opening (January 1, 2016) balance in units and costs of (1) raw materials, (2) work in process, and (3) finished goods.

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