The Bright Lamp Company has budgeted its conversion cost for the small lamp prod

Question

The Bright Lamp Company has budgeted its conversion cost for the small lamp production as $85,000 for 1,300 production hours. Each unit produced by the cell requires 15 minutes of process time. During the month, 3,800 units are manufactured in the cell. The estimated material cost is $18 per unit.

Required: Please Journal the following amounts using the following word bank. In your computations, round per unit cost to two decimal places and use rounded amount in subsequent calculations. If required, round your final answers to the nearest dollar.

WORD BANK

Accounts Payable

Conversion Costs

Raw and In Process Inventory

Sales

Supplies

Accounts Payable

Accounts Receivable

Cash

Cost of Goods Sold

Sales

1. Materials are purchased to produce 4,000 units.

a. _________$

b. _________$

2.  Conversion costs are applied to 3,800 units of production.

a. __________$

b.__________$

c. 3,650 units are placed into finished goods.

a. ___________$

b.____________$

Explanation / Answer

Journal entries Accounts title and explanations Debit $ Credit $ Raw and in process Inventory Account Dr. 72000       Accounts payable 72000 Raw and in process inventory Account Dr. 62115       Conversion cost 62115 Cost of Goods sold Dr. 125363      Raw and in process inventory Account 125363 Note: Conversion cost per hour: 85000/1300 = $ 65.384 per hour Total conversion cost for 3800 units: 3800/4 = 950 hours@65.384 = $62115

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