Develop, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $810,000 on conversion costs, for a total manufacturing cost of $1,610,000. During February 20,000 cameras are placed into production, but only 15,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 5,000 cameras. However, on average, these remaining 5,000 cameras are only 75% complete as to conversion costs. Read the requirement2. Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the purchase and use of direct materials. Journal Entry Date Accounts Debit Credit JE 1 (1) (2) (3) (4) Record the conversion costs. Journal Entry Date Accounts Debit Credit JE 2 (5) (6) (7) (8) Prepare a journal entry to transfer out the cost of goods completed. Journal Entry Date Accounts Debit Credit JE 3 (9) (10) (11) (12) Show the postings to the Work in Process account. Work in Process—Assembly Department Bal. 0 (13) (14) (15) (16) (17) (18) Bal. Bal. 1: Reference Direct Materials Conversion Costs Total Costs incurred during the period $800,000 $810,000 Equivalent units of work done in current period 20,000 18,750 Cost per equivalent unit $40.00 $43.20 $83.20 2: Requirement Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Process account.

Develop, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $810,000 on conversion costs, for a total manufacturing cost of $1,610,000. During February 20,000 cameras are placed into production, but only 15,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 5,000 cameras. However, on average, these remaining 5,000 cameras are only 75% complete as to conversion costs. Read the requirement2. Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the purchase and use of direct materials. Journal Entry Date Accounts Debit Credit JE 1 (1) (2) (3) (4) Record the conversion costs. Journal Entry Date Accounts Debit Credit JE 2 (5) (6) (7) (8) Prepare a journal entry to transfer out the cost of goods completed. Journal Entry Date Accounts Debit Credit JE 3 (9) (10) (11) (12) Show the postings to the Work in Process account. Work in Process—Assembly Department Bal. 0 (13) (14) (15) (16) (17) (18) Bal. Bal. 1: Reference Direct Materials Conversion Costs Total Costs incurred during the period $800,000 $810,000 Equivalent units of work done in current period 20,000 18,750 Cost per equivalent unit $40.00 $43.20 $83.20 2: Requirement Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Process account.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 3PA: Lean accounting Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar...

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5,000 cameras. However, on average, these remaining

5,000 cameras are only 75% complete as to conversion costs.

Read the requirement2.

Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. (Record debits first, then credits. Exclude explanations from any journal entries.)

Begin by recording the purchase and use of direct materials.

Journal Entry
Date	Accounts	Debit	Credit
JE 1		(1)
		(2)
		(3)
		(4)

Record the conversion costs.

Journal Entry
Date	Accounts	Debit	Credit
JE 2		(5)
		(6)
		(7)
		(8)

Prepare a journal entry to transfer out the cost of goods completed.

Journal Entry
Date	Accounts	Debit	Credit
JE 3		(9)
		(10)
		(11)
		(12)

Show the postings to the Work in Process account.

Work in Process—Assembly Department
Bal.	0
(13)		(14)
(15)		(16)
(17)		(18)
Bal.		Bal.

1: Reference

	Direct Materials	Conversion Costs	Total
Costs incurred during the period	$800,000	$810,000
Equivalent units of work done in current period	20,000	18,750
Cost per equivalent unit	$40.00	$43.20	$83.20

2: Requirement

Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Process account.

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