Asked by ronak hindocha on Jun 23, 2024
Verified
Pena Company is a lean manufacturer of dishwashers.Each dishwasher requires $140 of raw materials.Pena budgets $330,000 of conversion costs and 1,100 productions hours for the next year.Each dishwasher requires 1.5 production hours.Pena started 730 dishwashers during the year,completed 700,and sold 680.Each dishwasher is sold for $750.Actual conversion costs equal applied conversion costs.
Required
1.Prepare the journal entries to record (a)the purchase of raw materials to produce 730 units on credit,(b)applied conversion costs to the production of 700 units,(c)actual conversion costs of $315,000 (credit "Various Accounts"),(d)sale of 680 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 account has a zero beginning balance.
Conversion Costs
The combined costs of direct labor and manufacturing overhead to convert raw materials into finished goods.
Raw Materials
The basic substances or components used in the manufacturing or production process to create goods and products.
- Gain proficiency in calculating the terminal balance in finished goods inventory.
Verified Answer
JK
Jovan KostadinovicJun 29, 2024
Final Answer :
1.
2.Work in Process Inventory = $0 + $102,200 + $315,000 - $413,000 = $4,200
Finished Goods Inventory = $0 + $11,800 = $11,800
Conversion Costs = $315,000 actual - $315,000 applied = $0
2.Work in Process Inventory = $0 + $102,200 + $315,000 - $413,000 = $4,200
Finished Goods Inventory = $0 + $11,800 = $11,800
Conversion Costs = $315,000 actual - $315,000 applied = $0
Learning Objectives
- Gain proficiency in calculating the terminal balance in finished goods inventory.