Conversion costs - Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product. Conversion costs rate is calculated as follows- C o n v e r s i o n c o s t s r a t e p e r h o u r = T o t a l c o n v e r s i o n c o s t s / T o t a l h o u r s Requirement 1-: To compute: Conversion cost rate per hour

Question

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Answer 1

Question

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)

Explanation of Solution

First we need to find total hours needed for production of 520 units-

Total hours = Total units / Units produce in one hour Total hours = 520 units / 8 unitsTotal hours = 65 hours

Conversion cost assigned to 520 units is calculated as under-

Conversion cost = Total hours * Conversion cost rate per hourConversion cost = 65 hours * $625Conversion cost = $40,625

Conclusion:

Thus, journal entry is prepared to assign conversion costs.

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Question-38 From what base amount is salvage value deducted when calculating depreciation? a) Market value of asset b) Historical cost of asset c) Replacement cost d) Insurance value

a. A two-year insurance premium of $6,200 was paid on January 1, 2021, for coverage beginning on that date. As of December 31, 2021, the unadjusted balances were $6,200 for Prepaid Insurance and $0 for Insurance Expense. b. At December 31, 2021, you obtained the following data relating to supplies. Unadjusted balance in Supplies on December 31 Unadjusted balance in Supplies Expense on December 31 Supplies on hand, counted on December 31 Required: $ 10,000 62,000 6,000 1. Of the $6,200 paid for insurance, what amount should be reported on the 2021 income statement as Insurance Expense? What amount should be reported on the December 31, 2021, balance sheet as Prepaid Insurance? 2. What amount should be reported on the 2021 income statement as Supplies Expense? What amount should be reported on the December 31, 2021, balance sheet as Supplies? 3. Indicate the accounting equation effects of the adjustment required for (a) insurance and (b) supplies. Complete this question by entering your…

Answer 2

Question

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)

Explanation of Solution

First we need to find total hours needed for production of 520 units-

Total hours = Total units / Units produce in one hour Total hours = 520 units / 8 unitsTotal hours = 65 hours

Conversion cost assigned to 520 units is calculated as under-

Conversion cost = Total hours * Conversion cost rate per hourConversion cost = 65 hours * $625Conversion cost = $40,625

Conclusion:

Thus, journal entry is prepared to assign conversion costs.

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Answer 3

Question

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)

Explanation of Solution

First we need to find total hours needed for production of 520 units-

Total hours = Total units / Units produce in one hour Total hours = 520 units / 8 unitsTotal hours = 65 hours

Conversion cost assigned to 520 units is calculated as under-

Conversion cost = Total hours * Conversion cost rate per hourConversion cost = 65 hours * $625Conversion cost = $40,625

Conclusion:

Thus, journal entry is prepared to assign conversion costs.

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Answer 4

Question

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)

Explanation of Solution

First we need to find total hours needed for production of 520 units-

Total hours = Total units / Units produce in one hour Total hours = 520 units / 8 unitsTotal hours = 65 hours

Conversion cost assigned to 520 units is calculated as under-

Conversion cost = Total hours * Conversion cost rate per hourConversion cost = 65 hours * $625Conversion cost = $40,625

Conclusion:

Thus, journal entry is prepared to assign conversion costs.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)

Explanation of Solution

First we need to find total hours needed for production of 520 units-

Total hours = Total units / Units produce in one hour Total hours = 520 units / 8 unitsTotal hours = 65 hours

Conversion cost assigned to 520 units is calculated as under-

Conversion cost = Total hours * Conversion cost rate per hourConversion cost = 65 hours * $625Conversion cost = $40,625

Conclusion:

Thus, journal entry is prepared to assign conversion costs.

Answer 6

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

Answer 7

Chapter D, Problem 8QS

To determine

Concept Introduction:

Conversion costs-

Conversion cost is the sum of direct labor costs and manufacturing overhead costs. It is basically a manufacturing cost which is incurred to convert raw materials into final product.

Conversion costs rate is calculated as follows-

Conversion costs rate per hour = Total conversion costs / Total hours

Requirement 1-:

To compute:

Conversion cost rate per hour

Answer 8

Expert Solution

Answer to Problem 8QS

Conversion cost rate is $625 per hour.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Given,

Total conversion cost = $1,000,000
Total hours = 1,600 hours

Conversion costs rate per hour = Total conversion costsTotal hours Conversion costs rate per hour =$1,000,0001,600Conversion costs rate per hour =$625 per hour

Conclusion:

Thus, conversion cost rate per hour is $625.

Answer 13

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)

Explanation of Solution

First we need to find total hours needed for production of 520 units-

Total hours = Total units / Units produce in one hour Total hours = 520 units / 8 unitsTotal hours = 65 hours

Conversion cost assigned to 520 units is calculated as under-

Conversion cost = Total hours * Conversion cost rate per hourConversion cost = 65 hours * $625Conversion cost = $40,625

Conclusion:

Thus, journal entry is prepared to assign conversion costs.

Answer 14

To determine

Concept Introduction:

Journal entries-

The business runs with the transactions it makes. Every transaction results in some outcome like the creation of asset, liability, income, loss, gain or expense. The debits and the credits are made on the basis of the rules of the accounting.

Requirement 2-:

To prepare:

To prepare journal entry to apply conversion cost to an order of 520 units.

Answer 15

Expert Solution

Answer to Problem 8QS

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
A.	Conversion costs	40,625
	Special order		40,625
	(To assign conversion costs to special order)