Question

Vintage Audio Inc. manufactures audio speakers. Each speaker requires $108 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period:

Speaker assembly cell, estimated costs:
Labor	$34,100
Depreciation	4,570
Supplies	1,660
Power	1,250
Total cell costs for the period	$41,580

The operating plan calls for 165 operating hours for the period. Each speaker requires 20 minutes of cell process time. The unit selling price for each speaker is $292. During the period, the following transactions occurred:

1. Purchased materials to produce 730 speaker units.
2. Applied conversion costs to production of 695 speaker units.
3. Completed and transferred 665 speaker units to finished goods.
4. Sold 635 speaker units.

There were no inventories at the beginning of the period.

a. Journalize the summary transactions (1)-(4) for the period. Round the per unit cost to the nearest cent and use in subsequent computations. If an amount box does not require an entry, leave it blank.

1.
2.
3.
4. Sale
4. Cost

b. Determine the ending balance of raw and in process inventory and finished goods inventory.

Raw and In Process Inventory, ending balance	$
Finished Goods Inventory, ending balance	$

Answer 1

Budgeted cell conversion cost per hour	252	per hour	=41580/165
Budgeted cell conversion cost per unit	84	per unit	=252*(20/60)
a
Raw and in process inventory	78840		=730*108
Accounts Payable		78840
Raw and in process inventory	58380		=695*84
Conversion costs		58380
Finished goods inventory	127680		=665*(108+84)
Raw and in process inventory		127680
Accounts Receivable	185420		=635*292
Sales		185420
Cost of goods sold	121920		=635*(108+84)
Finished goods inventory		121920
b
Raw and In Process Inventory, ending balance	9540		=78840+58380-127680
Finished Goods Inventory, ending balance	5760		=127680-121920