Determine the cost of batteries that would appear in each of the following accounts at April 30: Raw Materials. b. a. Work in Process. C. Finished Goods.
Determine the cost of batteries that would appear in each of the following accounts at April 30: Raw Materials. b. a. Work in Process. C. Finished Goods.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![EXERCISE 2-12 Product Cost Flows; Product versus Period Costs [LO3, LO4]
The Devon Motor Company produces motorcycles. During April, the company purchased 8,000
batteries at a cost of $10 per battery. Devon withdrew 7,600 batteries from the storeroom during
the month. Of these, 100 were used to replace batteries in motorcycles used by the company’s
traveling sales staff. The remaining 7,500 batteries withdrawn from the storeroom were placed in
motorcycles being produced by the company. Of the motorcycles in production during April, 90%
were completed and transferred from work in process to finished goods. Of the motorcycles com-
pleted during the month, 30% were unsold at April 30.
There were no inventories of any type on April 1.
Required:
1. Determine the cost of batteries that would appear in each of the following accounts at April 30:
а.
Raw Materials.
b.
Work in Process.
с.
Finished Goods.
d.
Cost of Goods Sold.
Selling Expense.
e.
2. Specify whether each of the above accounts would appear on the balance sheet or on the in-
come statement at April 30.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc2d22eda-5edd-48ad-9b20-1e4fb4c98fe1%2Fac9e949d-4422-4825-994d-f34dce17532b%2F0sewtw9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:EXERCISE 2-12 Product Cost Flows; Product versus Period Costs [LO3, LO4]
The Devon Motor Company produces motorcycles. During April, the company purchased 8,000
batteries at a cost of $10 per battery. Devon withdrew 7,600 batteries from the storeroom during
the month. Of these, 100 were used to replace batteries in motorcycles used by the company’s
traveling sales staff. The remaining 7,500 batteries withdrawn from the storeroom were placed in
motorcycles being produced by the company. Of the motorcycles in production during April, 90%
were completed and transferred from work in process to finished goods. Of the motorcycles com-
pleted during the month, 30% were unsold at April 30.
There were no inventories of any type on April 1.
Required:
1. Determine the cost of batteries that would appear in each of the following accounts at April 30:
а.
Raw Materials.
b.
Work in Process.
с.
Finished Goods.
d.
Cost of Goods Sold.
Selling Expense.
e.
2. Specify whether each of the above accounts would appear on the balance sheet or on the in-
come statement at April 30.
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