Question

The annual budgeted conversion costs for a lean cell are $553,000 for 1,750 production hours. Each unit produced by the cell requires 15 minutes of cell process time. During the month, 650 units are manufactured in the cell. The estimated materials costs are $160 per unit.

Provide the following journal entries for March 31. Refer to the Chart of Accounts for exact wording of account titles.

A.	Materials are purchased to produce 710 units.
B.	Conversion costs are applied to 650 units of production.
C.	635 units are completed and placed into finished goods.

CHART OF ACCOUNTS
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

Journalize the entries for the transactions listed in the Instructions panel for March 31. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

Answer 1

	Budgeted cell conversion cost per hour	316	per hour	=553000/1750
	Budgeted cell conversion cost per unit	79	per unit	=316*(15/60)
Date	Description	Debit	Credit
March 31	Raw and in process inventory	113600		=710*160
	Accounts Payable		113600
March 31	Raw and in process inventory	51350		=650*79
	Conversion costs		51350
March 31	Finished goods inventory	151765		=635*(160+79)
	Raw and in process inventory		151765