Question

Auto-Motion is a lean manufacturer of self-driving wheelchairs. The company budgets $735,000 of conversion costs and 2.100 production hours for the next year. Each wheelchair requires 20 production hours and materials costs of $4,310. The company started and completed 76 wheelchairs during the year and sold 70. Each wheelchair is sold for $15,500. Actual conversion costs equal applied conversion costs. Required 1. Prepare journal entries to record (a) the purchase of raw materials on credit to produce 81 units, (b) applied conversion costs to the production of 76 units. (actual conversion costs of $532,000 (credit "Various Accounts"), (d) sale of 70 units on credit, and (e) ending Inventory and cost of goods sold. 2. Compute the ending balances of Work In Process Inventory, Finished Goods Inventory, and Conversion Costs. Assume each of these Inventory accounts began the year with a balance of zero. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record (a) the purchase of raw materials on credit to produce 81 units, (b) applied conversion costs to the production of 76 units, (c) actual conversion costs of $532,000 (credit "Various Accounts"), (d) sale of 70 units on credit, and (e) ending inventory and cost of goods sold. View transaction list Journal entry worksheet Record the purchase of raw materials to produce 81 units on credit. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

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DY Answer: ) Journal enties: Date particulars The Debit credit 2. Raw materials Ale {$4310x 81] or [*349.110 To creditors $349110 | Being purchase of Raw Materials] wheelchair Ale 64310 * 76) or $327,560 TO conversion cost $327560 y conversion co wheelchair Alc |$532,000 To various Accounts $532,000 d. Debtors Ale $15.500 x 70] or $1085,000 TO Sales |$1085,000 Being sales of wheelchair] Cost of goods sold Ale (4310x70] or $301,700 TO Raw Materials $275,840 To Finished goools Inventory $25860 [$4310 (76-70)] Being value of finished goods] 2)Ending balance of finished goods -Cistal prodeeced-Totaledd) cost of wheelchair - (76-70) $4310 .: Ending bakuce of finished goods = $25.860. b) conversion cost = Balance at the start of year - Amount - used with in the year. s $ 735,000 -(7664310) .: Conversion costs = *H07, 440. c) work in process at the end of year & unproduced units x cost of wheelchair $735,000%Wmv = 171 cuils ed/cost of Material perunit units acleally produceds 76 units un produced units = 17/-76 = 95 unils. work in process at end of year = 95 x $4310 .: wool in process at end of year = $ 409,450 NO