Audio Escape Inc. manufactures audio speakers. Each speaker requires $130 per un
ID: 2599425 • Letter: A
Question
Audio Escape Inc. manufactures audio speakers. Each speaker requires $130 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for December:
1
Speaker assembly cell, estimated costs:
2
Labor
$6,100.00
3
Depreciation
2,900.00
4
Supplies
2,200.00
5
Power
5,600.00
6
Total cell costs for the period
$16,800.00
The operating plan calls for 210 operating hours for the period. Each speaker requires 18 minutes of cell process time. The unit selling price for each speaker is $450. During December, the following transactions occurred:
There were no inventories at the beginning of December.
A. Journalize the summary transactions for December. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
1
2
3
4
5
6
7
8
9
10
B.
Determine the ending balance for raw and in process inventory and finished goods inventory.
1
Speaker assembly cell, estimated costs:
2
Labor
$6,100.00
3
Depreciation
2,900.00
4
Supplies
2,200.00
5
Power
5,600.00
6
Total cell costs for the period
$16,800.00
Explanation / Answer
A.
*Conversion cost per unit=manufacturing time×cell conversion cost rate
=(18/60)×(16800/210)
=$24 per unit
B.
Ending balance in:
Raw and process Inventory=$91,000+$16,200-101640
=$5,560
Finished goods Inventory(660-640=20units)=$101,640-$98,560
=$3,080
Or
=20 units×$154
=$3,080
Date Account titles Debit Credit Dec 2 Raw and in process Inventory(700×130) $91,000 Account payable $91,000 (To record material purchase) Dec 6 Raw and in process Inventory(675×$24*) $16,200 Conversion cost $16,200 (To record applied conversion cost) Dec 21 Finished Goods Inventory{($24+$130)×660 units} $101,640 Raw and in process Inventory $101,640 (To transfer the cost of completed goods) Dec 29 Account receivable $288,000 Sales(640+$450) $288,000Related Questions
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