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Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $680,000 of conversion costs and 2,000 production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,300. The company started and completed 75 wheelchairs during the year and sold 68. Each wheelchair is sold for $15,000. Actual conversion costs equal applied conversion costs. Required: 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 75 units, (b) applied conversion costs to the production of 75 units, (c) actual conversion costs of $637,500 (credit "Various Accounts"), (d) sale of 68 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 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. Ending Balances Work in process inventory $ Finished goods inventory 75,000 89.600 D

Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $680,000 of conversion costs and 2,000 production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,300. The company started and completed 75 wheelchairs during the year and sold 68. Each wheelchair is sold for $15,000. Actual conversion costs equal applied conversion costs. Required: 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 75 units, (b) applied conversion costs to the production of 75 units, (c) actual conversion costs of $637,500 (credit "Various Accounts"), (d) sale of 68 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 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. Ending Balances Work in process inventory $ Finished goods inventory 75,000 89.600 D

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 6CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...
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Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $680,000 of conversion costs and 2,000 production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,300. The company started and completed 75 wheelchairs during the year and sold 68. Each wheelchair is sold for $15,000. Actual conversion costs equal applied conversion costs. Required: 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 75 units, (b) applied conversion costs to the production of 75 units, (c) actual conversion costs of $637,500 (credit "Various Accounts"), (d) sale of 68 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 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. Ending Balances Work in process inventory $ Finished goods inventory 75,000 89.600 D
Transcribed Image Text:Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $680,000 of conversion costs and 2,000 production hours for this year. The manufacturing of each wheelchair requires 25 production hours and raw materials costs of $4,300. The company started and completed 75 wheelchairs during the year and sold 68. Each wheelchair is sold for $15,000. Actual conversion costs equal applied conversion costs. Required: 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 75 units, (b) applied conversion costs to the production of 75 units, (c) actual conversion costs of $637,500 (credit "Various Accounts"), (d) sale of 68 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 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. Ending Balances Work in process inventory $ Finished goods inventory 75,000 89.600 D
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