Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $608,000 of conversion costs and 1,900 production hours for the next year. Each wheelchair requires 25 production hours and materials costs of $4,470. The company started and completed 92 wheelchairs during the year and sold 82. Each wheelchair is sold for $16,500. Actual conversion costs equal applied conversion costs. Required 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 97 units, (b) applied conversion costs to the production of 92 units, (c) actual conversion costs of $736,000 (credit "Various Accounts"), (d) sale of 82 units on credit, and (e) ending inventory and cost of goods sold. 2. Compute the ending balances of Work in Process Inventory, Finished Goods Inventory, and Conversion Costs. Assume each of these inventory accounts began the year with a balance of zero.

Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $608,000 of conversion costs and 1,900 production hours for the next year. Each wheelchair requires 25 production hours and materials costs of $4,470. The company started and completed 92 wheelchairs during the year and sold 82. Each wheelchair is sold for $16,500. Actual conversion costs equal applied conversion costs. Required 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 97 units, (b) applied conversion costs to the production of 92 units, (c) actual conversion costs of $736,000 (credit "Various Accounts"), (d) sale of 82 units on credit, and (e) ending inventory and cost of goods sold. 2. Compute the ending balances of Work in Process Inventory, Finished Goods Inventory, and Conversion Costs. Assume each of these inventory accounts began the year with a balance of zero.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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