Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 1, Problem 1.17E
McQueen Motor Company manufactures automobiles. During September 2017, the company purchased 5,000 head lamps at a cost of $15 per lamp. McQueen withdrew 4,650 lamps from the warehouse during the month. Fifty of these lamps were used to replace the head lamps in autos used by trawling sales staff. The remaining 4,600 lamps were put in autos manufactured during the month.
Of the autos put into production during September 2017, 90% were completed and transferred to the company’s storage lot. Of the cars completed during the month, 70% were sold by September 30.
Instructions
(a) Determine the cost of head lamps that would appear in each of the following accounts at September 30, 2017: Raw Materials, Work in Process, Finished Goods, Cost of Goods Sold, and Selling Expenses.
(b) 
Write a short memo to the chief accountant, indicating whether and where each of the accounts in (a) would appear on the income statement or on the balance sheet at September 30, 2017.
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Shutter,
Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January
2017,
the company incurred
$850,000
on direct materials and
$805,000
on conversion costs, for a total manufacturing cost of
$1,655,000.
During February
5,000
cameras are placed into production, but only
3,000
cameras are fully completed at the end of the month. All direct materials have been added to the remaining
2,000
cameras. However, on average, these remaining
2,000
cameras are only
60%
complete as to conversion costs.
1(Click
the icon to view the data on the cameras.)
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)…
Chapter 1 Solutions
Managerial Accounting: Tools for Business Decision Making
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