Question

The budgeted conversion costs for a just-in-time cell are $244,720 for 3,800 production hours. Each unit produced by the cell requires 45 minutes of cell process time. During the month, 2,100 units are manufactured in the cell. The estimated materials cost is $50 per unit. What would be the journal entry to record the materials purchased on account to produce 2,200 units

Answer 1

Answer:  Debit to Raw and In Process Inventory $ 110,000

Credit to Accounts Payable $ 110,000  

Explanation:

Budgeted Conversion Cost  = $ 244,720      

Total Production hours = 3,800 hours      

Material cost per unit = $ 50 per unit

Material purchase for 2,200units (50 x 2,200) = $ 110,000    

Journal to record  purchase of raw material for 2200 units at $50

Accounts title and explanation      Debit                 Credit    

Raw and In process Inventory        $ 110,000      

Accounts Payable                                                             $110,000