Question

Lean Accounting Vintage Audio Inc, manufactures audio speakers. Each speaker requires $100 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period: Speaker assembly cell, estimated costs: Labor Depreciation $39,660 5,320 1,930 1,450 Supplies Power Total cell costs for the period $48,360 The operating plan calls for 155 operating hours for the period. Each speaker requires 15 minutes of cell process time. The unit selling price for each speaker is $271. During the period, the following transactions occurred: 1. Purchased materials to produce 370 speaker units. 2. Applied conversion costs to production of 350 speaker units. 3. Completed and transferred 335 speaker units to finished goods. 4. Sold 320 speaker units. There were no inventories at the beginning of the period.

Answer 1

Answer
Answer 1
Conversion cost per hour = $48360 /155 = $312 per hour
Total product cost per unit = Direct material per unit + Conversion cost per unit = $100 + $312*15/60 = $178 per unit
Journal Entries - Vintage Audio Inc.
Event	Particulars	Debit	Credit
a	Raw and In Process Inventory Dr	$     37,000
	To Accounts Payable (370*$100)		$          37,000
b	Raw and In Process Inventory Dr	$     27,300
	To Conversion cost (350/60*15*$312)		$          27,300
c	Finished goods inventory Dr (335*$178)	$     59,630
	To Raw and In Process Inventory		$          59,630
d.1	Accounts receivables Dr (320*$271)	$     86,720
	To Sales		$          86,720
d.2	Cost of goods sold Dr (320*$178)	$     56,960
	To Fininshed goods invenotry		$          56,960
Answer 2
Raw and in process inventory ending balance = $37,000 + $27300 - $59630 = $4670
Finished goods inventory ending balance = $59630 - $56960 = $2670