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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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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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)