Required information The following information applies to the questions displaye

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Required information The following information applies to the questions displayed below.] 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. (E denotes the British monetary unit, pounds sterling.) Retns in prcess, February 1 (37% Returns started in February Returns in process,February 28: 470 1,240 complete) (70% complete) 510 Returns in process, February 1 Labor Overhead E 4,100 5,000 89,320 61,951 Labor, February (6,380 hours) overhead, February Although the euro is used in most European markets, day-to-day business in the United Kingdom continues to be conducted in pounds sterling. 2. Compute the cost of returns in process as of February 28. Cost of returns in process

Explanation / Answer

1a Labor Overhead Units completed and transferred 1200 1200 Returns in process, February 28 357 357 Total equivalent units of activity 1557 1557 b Labor Overhead Total costs 93420 66951 Total equivalent units of activity 1557 1557 Cost per equivalent unit 60 43 2 Cost of return in Process 36771 =(357*60)+(357*43)

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