Question

The annual budgeted conversion costs for a lean cell are $563,200 for 1,600 production hours. Each unit produced by the cell requires 15 minutes of cell process time. During the month, 645 units are manufactured in the cell. The estimated materials costs are $140 per unit.

Provide the following journal entries for March 31. Refer to the Chart of Accounts for exact wording of account titles.

A.	Materials are purchased to produce 720 units.
B.	Conversion costs are applied to 645 units of production.
C.	630 units are completed and placed into finished goods.

Answer 1

Journal Entries Account Tittes. ................. Debit Credit 1. Rani Material and Work In broces Inventory $109800 Accounts Payable (To record material purchases) $.100800 (720 units X $ 140 por Unit = $ 56,760 2. Rame Material and work in brocess Inventory conversion cost (To rewrd conversion. Cost applied) $56760 (1645 units X 15mins ) x $563,200 bomins 1600 $143,640 $143,640 3. Finished Goods Inventory Raw Material & Work in Process Inventory. (to record compleled unik teastered to... Tinished Goods ((630 cns xf240) + ($56760 x630)) 645