Question

In: Accounting

udio Escape Inc. manufactures audio speakers. Each speaker requires $125 per unit of direct materials. The...

udio Escape Inc. manufactures audio speakers. Each speaker requires $125 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

$5,800.00

3

Depreciation

2,900.00

4

Supplies

2,100.00

5

Power

20,700.00

6

Total cell costs for the period

$31,500.00

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 $380. During December, the following transactions occurred:

Dec. 2 Purchased materials to produce 800 speaker units.
6 Applied conversion costs to production of 780 speaker units.
21 Completed and transferred 765 speaker units to finished goods.
29 Sold 750 speaker units.

There were no inventories at the beginning of December.

Required:
A. Journalize the summary transactions for December. Refer to the Chart of Accounts for exact wording of account titles.
B. Determine the ending balance for raw and in process inventory and finished goods inventory.
CHART OF ACCOUNTS
Audio Escape Inc.
General Ledger
ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
150 Raw and In Process Inventory
151 Finished Goods Inventory
180 Land
190 Equipment
191 Accumulated Depreciation-Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customers Refunds Payable
221 Notes Payable
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
34

Income Summary

Lean accounting

Instructions

Chart of Accounts

Journal

Final Question

X

Instructions

Audio Escape Inc. manufactures audio speakers. Each speaker requires $125 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

$5,800.00

3

Depreciation

2,900.00

4

Supplies

2,100.00

5

Power

20,700.00

6

Total cell costs for the period

$31,500.00

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 $380. During December, the following transactions occurred:

Dec. 2 Purchased materials to produce 800 speaker units.
6 Applied conversion costs to production of 780 speaker units.
21 Completed and transferred 765 speaker units to finished goods.
29 Sold 750 speaker units.

There were no inventories at the beginning of December.

Required:
A. Journalize the summary transactions for December. Refer to the Chart of Accounts for exact wording of account titles.
B. Determine the ending balance for raw and in process inventory and finished goods inventory.

X

Chart of Accounts

CHART OF ACCOUNTS
Audio Escape Inc.
General Ledger
ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
150 Raw and In Process Inventory
151 Finished Goods Inventory
180 Land
190 Equipment
191 Accumulated Depreciation-Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customers Refunds Payable
221 Notes Payable
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
34 Income Summary
REVENUE
410 Sales
EXPENSES
510 Cost of Goods Sold
511 Conversion Costs
521 Advertising Expense
523 Depreciation Expense-Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense

X

Journal

A. Journalize the summary transactions for December. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

DATE DESCRIPTION POST. REF. DEBIT CREDIT

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.

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

Solutions

Expert Solution

Budgeted cell conversion cost per hour 150 per hour =31500/210
Budgeted cell conversion cost per unit 45 per unit =150*(18/60)
A
Date Description Debit Credit
Dec 31 Raw and in process inventory 100000 =800*125
     Accounts Payable 100000
Dec 31 Raw and in process inventory 35100 =780*45
       Conversion costs 35100
Dec 31 Finished goods inventory 130050 =765*(125+45)
       Raw and in process inventory 130050
Dec 31 Accounts Receivable 285000 =750*380
       Sales 285000
Dec 31 Cost of goods sold 127500 =750*(125+45)
        Finished goods inventory 127500
B
Raw and In Process Inventory,ending 5050 =100000+35100-130050
Finished Goods Inventory, ending 2550 =130050-127500

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