Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $560,000 of conversion costs and 1,600 production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,350. The company started and completed 85 wheelchairs during the year and sold 69. Each wheelchair is sold for $16,000. Actual conversion costs equal applied conversion costs. Required: 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 85 units, (b) applied conversion costs to the production of 85 units, (c) actual conversion costs of $743,750 (credit "Various Accounts"), (d) sale of 69 units on credit, and (e) ending inventory and cost of goods sold. 2. Compute the ending balances of Work in Process Inventory and Finished Goods Inventory. Assume each of these inventory accounts began the year with a balance of zero. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record (a) the purchase of raw materials on credit to produce 85 units, (b) applied conversion costs to the production of 85 units, (c) actual conversion costs of $743,750 (credit "Various Accounts"), (d) sale of 69 units on credit, and (e) ending inventory and cost of goods sold.
Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $560,000 of conversion costs and 1,600 production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,350. The company started and completed 85 wheelchairs during the year and sold 69. Each wheelchair is sold for $16,000. Actual conversion costs equal applied conversion costs. Required: 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 85 units, (b) applied conversion costs to the production of 85 units, (c) actual conversion costs of $743,750 (credit "Various Accounts"), (d) sale of 69 units on credit, and (e) ending inventory and cost of goods sold. 2. Compute the ending balances of Work in Process Inventory and Finished Goods Inventory. Assume each of these inventory accounts began the year with a balance of zero. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record (a) the purchase of raw materials on credit to produce 85 units, (b) applied conversion costs to the production of 85 units, (c) actual conversion costs of $743,750 (credit "Various Accounts"), (d) sale of 69 units on credit, and (e) ending inventory and cost of goods sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $560,000 of conversion costs and 1,600
production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,350.
The company started and completed 85 wheelchairs during the year and sold 69. Each wheelchair is sold for $16,000. Actual
conversion costs equal applied conversion costs.
Required:
1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 85 units, (b) applied conversion costs to the
production of 85 units, (c) actual conversion costs of $743,750 (credit "Various Accounts"), (d) sale of 69 units on credit, and (e) ending
inventory and cost of goods sold.
2. Compute the ending balances of Work in Process Inventory and Finished Goods Inventory. Assume each of these inventory
accounts began the year with a balance of zero.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare journal entries to record (a) the purchase of raw materials on credit to produce 85 units, (b) applied conversion costs to the
production of 85 units, (c) actual conversion costs of $743,750 (credit "Various Accounts"), (d) sale of 69 units on credit, and (e) ending
inventory and cost of goods sold.
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