Question: Standard-costing with beginning and ending work in process. Lawrence Company is a manufacturer of contemporary door handles. The vice president of Design attends home shows twice a year so the company can keep current with home trends. Because of its volume, Lawrence uses process costing to account for production. Costs and output figures for August are as follows:
1. Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule.
2. Compute the total standard costs of handles transferred out in August and the total standard costs of the August 31 inventory of work in process.
3. Compute the total August variances for direct materials and conversion costs.
4. Prepare summarized journal entries to record both the actual costs and standard costs for direct materials and conversion costs, including the variances for both production costs.