The Devon Motor Company produces motorcycles. During April, the company purchase

Question

The Devon Motor Company produces motorcycles. During April, the company purchased 8,000 batteries at a cost of $10 per battery. Devon withdrew 7,600 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in motorcycles used by the company's traveling sales staff. The remaining 7,500 batteries withdrawn from the storeroom were placed in motorcycles being produced by the company. Of the motorcycles in production during April, 90% were completed and transferred from work in process to finished goods. Of the motorcycles completed during the month, 30% were unsold at April 30.
There were no inventories of any type on April 1.

Determine the cost of batteries that would appear in each of the following accounts at April 30 (Omit the "$" sign in your response):

Determine the cost of batteries that would appear in each of the following accounts at April 30 (Omit the "$" sign in your response):

Explanation / Answer

Total Batteries 8000 Less WIthdrawn 7600 --------------------------- Bal Inventory 400@$10 = $4000 ---------------------------------- 100 Battery @$10 used for internal usage = $1000 Used for Production Raw Material 7600-100 = 7500@$10 = $75,000 Battery will be fitted in m/cycle only when it is complete. so 90% of 7500 = 6750 are consumed (@$10 = $67,500)........C. Finished Goods 10% are WIP = 750*$10 = $7500 30% were unsold ie 30%*6750 = 2025@$10 = $20,250 70% were sold ie 70%*6750 = 4725@$10 = $47,250........d. COGS Selling expense can't be determined from the info provided. If you have missed out someinfo, pl repost.

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